The U.S. economy added another solid round of new-job gains last month, data indicated Friday, with overall wages easing modestly and adding to recent signals of cooling inflation pressures.
The Labor Department's Bureau of Labor Statistics said that a net 206,000 new jobs were created in June, down from the downwardly revised total of 218,000 recorded in May and south of this year's average of around 248,000. Economists were looking for a headline total of 190,000 in the June report.
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The economy has added 1.334 million new jobs over the first six months of the year, down around 23% from the 1.736 million total created over the year-earlier period, as revisions to prior estimates removed around 111,000 in gains over the past thee months.
Average hourly earnings rose 0.3% from May levels, matching Wall Street forecasts, and were up 3.9% on an annual basis, the slowest pace of growth in three years.
The headline unemployment rate edged higher to 4.1%, ending its streak of at or sub-4% readings at a record 28 consecutive months. The labor force participation rate, meanwhile, nudged higher, to 62.6%.
"The equity market may be a little conflicted how to respond to today’s jobs report," said Seema Shah, chief global strategist at Principal Asset Management. "On one hand, the downward revisions to prior months and the rise in the unemployment rate raises the odds of a September Fed rate cut – bond markets are certainly celebrating this."
"But those same figures cannot help but prompt a twinge of concern about the direction of the U.S. economy," she added. "The broad host of economic data all point to a softening – today’s report adds to that picture."
U.S. stock futures were little-changed following the data release, with the S&P 500 priced for a 5 point dip and the Dow Jones Industrial Average called 15 points higher. The tech-focused Nasdaq is set for a 7 point pullback.
Benchmark 10-year Treasury note yields were marked 2 basis points lower at 4.315% following the data release, while 2-year notes fell 3 basis points to 4.641%.
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CME Group's FedWatch, meanwhile, suggests no chance of a change in Fed rates when the central bank meets next month in Washington, but pegs the odds of a September reduction at around 75%.
The Atlanta Fed's GDPNow forecasting tool suggests a second quarter advance of 1.5%, only modestly ahead of the 1.3% pace recorded over the first three months of the year.
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Earlier this week, payroll processing group ADP's National Employment Report showed a slowdown in private sector hiring, with 160,000 new roles created. And it showed the slowest pace of wage gains in three years for those remaining in their positions.
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Challenger Gray's monthly report of corporate layoffs, however, showed overall job cuts fell by nearly 24%, to just under 50,000 last month, while overall layoffs for the first half were down 5.1% compared with 2023 levels.
“June is typically a low month for job cut announcements, as most companies are midyear or at the end of their fiscal years," the firm's group vice president, Andrew Challenger, said. "The months following fiscal year ends tend to have a spike in cuts, as those plans are implemented."
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