US job growth slows in June, but remains strong

US job growth slows in June, but remains strong

US job growth slowed more than expected in June after rebounding the previous month, but the labor market situation remains tense, with the unemployment rate easing from seven-month highs and continued strong wage growth.

Nonfarm payrolls increased by 209,000 jobs last month, the Labor Department reported Friday in its employment report.

Data for May was revised down to show an increase of 306,000 instead of 339,000 as previously reported.

Economists polled by Reuters had forecast an increase of 225,000 jobs. The economy needs to create between 70,000 and 100,000 jobs per month to keep up with the growth of the active population.

The unemployment rate fell to 3.6% from 3.7% in May.

Although job growth is slowing, the labor market is holding firm despite the fact that the Federal Reserve has raised rates by 500 basis points since March 2022, when it embarked on its fastest monetary-tightening campaign in more than 40 years.

For now, it’s helping the economy defy economists’ recession predictions.

Average hourly earnings grew 0.4% last month, after rising by the same percentage in May. In the 12 months through June, wages rose 4.4%, matching May’s advance.

Annual wage growth remains too high to be consistent with the Fed’s 2% inflation target. The central bank will almost certainly resume rate hikes this month, as its chairman Jerome Powell said after a break in June.

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Written by Editor TLN

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