The US added 209,000 new jobs in June as hiring slowed amid signs the economy is cooling.
It was the weakest gain since December 2020, lower than the 240,000 jobs economists had expected and lower than the 309,000 jobs added in May. But the increase was also the 30th consecutive month of jobs gains, and the unemployment rate ticked down to the historically low rate of 3.6%.
The US job market has remained robust despite the Federal Reserve’s aggressive attempts to slow the economy and tamp down inflation with more than a year of interest rate hikes. The Fed chair, Jerome Powell, has indicated that the central bank will likely raise rates again this month after announcing a pause in June.
Wages rose 4.4% in June from a year earlier.
At an annual rate of 4%, US inflation remains twice as high as the Fed’s target and some economists have raised fears the central bank’s steep rate hikes could trigger job losses and a recession.
President Joe Biden hailed the latest hirings figures. “We are seeing stable and steady growth,” Biden said in a statement. “That’s Bidenomics - growing the economy by creating jobs, lowering costs for hardworking families, and making smart investments in America.”
But the news is unlikely to deter the Fed from raising rates again this month.
In a note to investors, Capital Economics said the 209,000 rise “suggests labour market conditions are finally beginning to ease more markedly. That said, it is unlikely to stop the Fed from hiking rates again later this month”.
The latest figures from the Bureau of Labor Statistics come after the private sector reported a sharper than expected rise in hiring in June. Private employers added 497,000 new jobs last month, the private payroll supplier ADP reported on Thursday, well ahead of the 267,000 gain in May and much better than the 220,000 analysts had estimated. The near half-million rise was the largest monthly increase in over a year with leisure and hospitality jobs accounting for the largest volume of hires.
“Consumer-facing service industries had a strong June, aligning to push job creation higher than expected,” said Nela Richardson, chief economist at ADP. “But wage growth continues to ebb in these same industries, and hiring likely is cresting after a late-cycle surge.”
There are some other signs that the job market is cooling. The number of job vacancies is falling in the US, with 9.9m open positions in the US on the last day of May, 1.6 unfilled positions for each person counted as unemployed. That figure was down from the record 12m open positions in March of last yearbut is still higher than before the pandemic.
ADP’s report came after the latest survey from employment firm Challenger, Gray & Christmas showed layoffs in the US nearly halved in June from a month earlier. The fall came as job cuts in the technology sector waned after months of layoffs from tech giants including Amazon, Meta and Google.
But the 40,709 cuts announced in June were still up 25% from the 32,517 announced in the same month one year prior, the sixth time this year when cuts were higher than the corresponding month a year earlier.
