World Cup hiring boom failed to materialize in tepid June jobs report

While most of the country practically boiled during last week’s heat wave, the jobs report was unseasonably cool.

After three months of triple-digit job gains, employers added just 57,000 jobs in June, per the Bureau of Labor Statistics’ latest jobs report, below economists’ expectations of 115,000. The underwhelming employment gains delivered a blow to experts who anticipated a World Cup-driven boost to the US economy.

Diving into the data. June payroll gains were down 72,000 from May’s 129,000, revised down from 172,000. April job gains were also revised down to 148,000. Both months added 74,000 fewer jobs than the BLS originally estimated.

“A series of stronger jobs report in March, April and May had given hopes that the job market was an accelerating trend, but instead, the June data is more of a fizzle than a sparkle,” Daniel Zhao, Glassdoor’s chief economist, wrote on LinkedIn.

The unemployment rate edged down to 4.2%, from 4.3% in May. However, that was largely because of a decline in labor force participation, which fell by 720,000 to a rate of 61.5% in June, its lowest rate in 50 years (excluding the early Covid-19 pandemic years), partly due to discouraged job seekers giving up on their search.

Average hourly earnings rose to $37.64, up 3.5% year over year. However, wage gains were still below inflation, which rose 4.2% on a yearly average in May.

By sector, professional and business services added 36,000 jobs in June, the most of any industry, followed by social assistance, which added 25,000 jobs, and healthcare, which added 22,000, below its 12-month average monthly gains of 38,000.

No World Cup boom. The World Cup was expected to bring a hiring boom to the US this summer.

Ahead of the global tournament, FIFA predicted that the World Cup, hosted by 16 host cities in North America, including 11 in the US, would generate $47 billion ($30.5 billion specifically for the US) and 185,000 jobs. That stat was proudly touted by the Trump Administration, which affixed it to the White House World Cup task force webpage. A more conservative estimate from Goldman Sachs analysts predicted that the tournament would add 40,000 jobs to the June employment data.

Yet the labor market report barely added more than that estimate in June. Leisure and hospitality, a sector heavily dependent on tourism, actually lost 61,000 jobs in June, wiping out the 40,000 gains the sector reported between April and May. Hotels and businesses in some host cities, particularly in Seattle, reported lower than anticipated reservations or sales from the tournament.

“Among the losses, leisure and hospitality dropping 61K is a shocker. Considering that 4.6 million fans shattered World Cup group stage attendance records, this is a eye opening moment,” Jim McCoy, CEO of Atlas HXM, an employer of record services firm, said in a statement. But considering the boost seen in other cities—including Boston, where 50,000 Scotts descended and dried out local pubs—McCoy added, “It makes me wonder how bad these numbers would have been if 11 US cities weren’t hosting the World Cup.”