U.S. employers slowed hiring last month and added only 57,000 jobs, less than half the previous month’s total and a sign companies still have a cautious economic outlook.

The Labor Department said Thursday that the unemployment rate declined to a low 4.2% from 4.3% in May, though the drop mostly occurred because many people out of work gave up looking and were no longer counted as unemployed.

The figures suggest businesses remain wary of the economy’s health, with inflation at a three-year high and consumer confidence near post-pandemic lows. The job market has been stuck in a “low-hire, low-fire” rut in which the employed enjoy some job security with layoffs low, but those out of work are struggling to get hired. Strong hiring in the spring raised hopes the economy was escaping that dynamic, but Thursday’s report suggests job gains are still muted.

“We are in a market that is still very fragile, and still susceptible to shocks happening,” Nicole Bachaud, labor economist at ZipRecruiter, an online job platform, said. “There is still a lot of hesitation on the part of employers and workers themselves to make any moves.” She noted that other government data shows companies are posting more jobs but not filling them.

Hiring has improved from last year, when employers added fewer than 10,000 jobs a month, on average. In this year’s first half the pace improved to 92,000. Yet healthy job gains that were initially reported in April and May were revised lower, from 172,000 down to 129,000 in May and from 179,000 to 148,000 in April.