(Bloomberg) -- An assortment of cautionary signals emerged in the latest US jobs report, including weak and concentrated hiring in the private sector as well as a dip in hours worked that underscore a fragile job market.

Education Mirage

The addition of 147,000 jobs in June exceeded all but one estimate in a Bloomberg survey of economists. But the increase in employment was largely owed to a jump in state and local government education payrolls that a number of economists described as suspect.

Health Care Provided Biggest Boost to Private US Payrolls | Job growth more modest in other sectors, with payrolls falling in some

The Bureau of Labor Statistics may have had trouble adjusting the raw data to account for a later-than-normal start to summer vacation in some areas of the country, Pantheon Macroeconomics economists Samuel Tombs and Oliver Allen said in a note. Regardless, “an unwind of June’s boost, either immediately or in September, is a sensible expectation.”

Without adjusting for seasonal factors, state government education payrolls declined in June.

Looking beyond the headline payrolls figure, Thursday’s report showed the weakest gain in employment excluding government since October. Private payrolls rose 74,000 last month, about half as much as in May.

Narrow Job Gains

The broad-based hiring seen late last year is beginning to wither away. The health care and social assistance industry accounted for nearly 80% of all private sector job growth in June. Excluding that advance, companies added roughly 15,000 jobs — the least in eight months.

Retail trade, transportation and warehousing, as well as leisure and hospitality registered only modest payroll gains while other industries posted declines. Manufacturers cut jobs for a second straight month, including a slight decline at automakers, and payrolls at wholesale trade companies dropped by the most in more than a year.

Less Than Half of Industries Boosted Payrolls in June | Health care accounted for 79% of the 74,000 gain in private employment

The so-called diffusion index — which offers insight into the breadth of industries adding to payrolls — indicated less than half of US industries increased employment in June.

Fewer Hours

The slowdown in demand so far this year also prompted companies to reduce the number of hours worked for the first time since the start of the year. Economists pay close attention to that metric because employers tend to cut hours before they lay off workers when the economy slows.

Proxy for US Labor Income Stalled in June | Broad measure that includes payrolls, hours and pay weakest in 11 months

As a result, aggregate weekly payrolls — a measure that combines employment, hours worked and hourly earnings and serves as a proxy for total labor income — were flat last month, the weakest in nearly a year.

Black Unemployment

While the overall jobless rate edged lower, the unemployment rate for Black workers jumped to the highest since January 2022. That reflected a surge in joblessness among Black men.

While it’s not clear what drove the sharp increase, economists note Black workers have historically been among the first to be laid off in prior business cycles. Black Americans tend to be overrepresented in low-wage sectors that quickly feel the effects when the economy falters.

Black Unemployment Rate Jumps | Jobless rate stood at highest level in more than three years in June

“Black unemployment is a notably volatile series given smaller sample sizes so it’s important to watch trends over several months,” Elise Gould, a senior economist at the Economic Policy Institute, said in a note. “That said, the increase in Black unemployment to 6.8% is hard to ignore.”