In June 2025, a strong surge in the job market made headlines—largely due to a boom in the public sector. Overall, the September report from the U.S. Bureau of Labor Statistics (BLS) was boosted by a stunning increase of 73,000 new government jobs. This increase accounts for nearly all of the overall nonfarm payroll growth 147,000 for the month. This major increase reflects a strong state and local government hiring rebound, with more public sector jobs coming back, especially at the state level.
State government payrolls also grew by 47,000 jobs, but local governments added a further 33,000 positions. Despite these gains, the net result for the federal government was a loss of 7,000 jobs in June. This is clear from Bankrate’s senior economic analyst, Mark Hamrick, who strongly underscored the importance of hiring at the state and local levels.
“Government at the state and local levels did much of the hiring in June,” – Mark Hamrick
Government sector jobs boomed, especially outside of Greater Washington. This is significant because it reflects a larger shift in where we’re seeing the strongest employment growth in the public sector. A lot of things have caused this trend. A major contributing reason is the efficiency efforts put in place during the Trump Administration to make government more efficient and effective.
In addition to government employment, the health care and social assistance sectors saw substantial growth, adding more than 58,000 positions in June. Payroll growth was strong in leisure and hospitality as well as construction. While other sectors kept afloat during this period, manufacturing and wholesale trade both lost an additional 7,000 net jobs.
That’s notable, because the totality of the jobs report exceeded expectations, providing evidence of resilience in key aspects of the labor market. Hamrick pointed out that the net new payrolls number was well above expectations.
“The total payrolls number to top expectations.” – Mark Hamrick
Policymakers and economists are still trying to figure out these trends. This new data paints a nuanced picture where government employment greatly inflates total job growth.