US unemployment rate falls to 4.2% as more workers leave labor force

The US labor force participation rate fell to 61.5% in June, its lowest level since March 2021 and the weakest outside the pandemic in 50 years, according to the Bureau of Labor Statistics.

About 720,000 people left the labor force during the month, while the number of people not in the labor force increased by 832,000. The decline helped lower the unemployment rate to 4.2%, even as fewer Americans looked for work. 

The employment-to-population ratio also slipped to 59%, its lowest since October 2021. 

Economists said the trend points to a cooling labor market rather than stronger hiring. They noted that participation among prime-age workers aged 25 to 54 dropped to 83.3%, its lowest since December 2023, suggesting retirements alone cannot explain the decline. 

Analysts warned that weakening job opportunities are prompting more Americans to stop searching for work.