‘More fizzle than sparkle’: June jobs report fails to launch a July 4 firework

June’s jobs report did not just miss expectations; it also complicated the story economists had been telling about a labor market that might be reaccelerating into summer. Payrolls rose by only 57,000, and both April and May were revised down by a combined 74,000 jobs, which means the recent pace of hiring looks weaker in retrospect than it did on the day those reports were first released. That matters because revisions can change the signal from a single month’s surprise into a broader pattern of slowing momentum.

In a statement sent to Fortune, Glassdoor Chief Economist Daniel Zhao said the report “put a damper on the fireworks” and left the labor market looking “more fizzle than sparkle,” arguing that the unemployment rate’s drop to 4.2% is less reassuring than it appears because it was driven by a fall in labor force participation to 61.5%, not by a surge in hiring.

LPL Financial Chief Economist Jeffrey Roach made a quick calculation and noted that it means an additional 2.5 million have dropped out of the labor force since last year. Zooming further out, it means that Americans not in the labor force rose to 105.8 million, “most likely due to folks giving up looking for work,” which he called a “concerning trend.” The bottom line for Roach, he wrote, is that firms are still adding to their payrolls, but hours worked are below pre-pandemic levels as firms cut back.

Glassdoor’s Zhao also noted that wage growth came in at 3.5% year-over-year, still solid enough to keep inflation concerns alive even as job creation cools.

The sector details reinforce that mixed picture. Zhao pointed out that leisure and hospitality lost 61,000 jobs in June, with accommodation, food services and related categories all declining, while only smaller pockets such as temporary help and some local government roles saw gains tied to event staffing. In other words, the report did not show broad-based strength; it showed a handful of offsets that were too small to reverse the bigger weakness.

Jamie Cox, Managing Partner for Harris Financial Group, counted himself skeptical: “These data are misleading and should be disregarded,” he argued. “There is zero chance leisure and hospitality posts a negative print in the midst of the World Cup.” He predicted revisions higher in the next few months.

Janus Henderson Investors’ Bradford Smith described payrolls as “lighter than expected” and noted that the June figure was the weakest since February. He added that the softer labor backdrop, combined with moderating oil-price inflation, likely leaves the Federal Reserve on hold for the next meeting.

Similarly, Chris Zaccarelli, Chief Investment Officer for Northlight Asset Management, called the report a “stark reversal” with “a lot less jobs created than expected,” while the exuberant prior months’ numbers were revised lower.

Taken together, the reactions suggest a labor market that is still expanding, but only modestly, and one that is giving policymakers less reason to worry about overheating. That makes the holiday-week backdrop look less like a policy turning point and more like a slow, uneven summer drift.

This story was originally featured on Fortune.com