U.S. employers added 206,000 jobs in June, as hiring remained steady despite persistent inflation and high interest rates.
But the employment picture is mixed at best, with job creations for April and May revised down by 111,000 and the private sector adding a disappointing 136,000 jobs.
Separately, the unemployment rate, calculated from a separate household survey, rose from 4% to 4.1%, its highest level since November 2021, the Labor Ministry announced on Friday.
Economists polled by Bloomberg estimated that 195,000 jobs were created last month, meaning job creation slightly beat estimates.
But the labor market has been significantly less buoyant than expected in the spring. Job creations were revised downward, from 165,000 to 108,000 in April and from 272,000 to 218,000 in May.
Are wages going down or up?
And the average hourly wage rose 10 cents to $35, reducing the annual increase to 3.9%, the lowest level since June 2021.
Wage growth has generally slowed as pandemic-related labor shortages have eased, but it remains above the 3.5% pace that is in line with the Federal Reserve’s 2% inflation target.
Many Americans, meanwhile, have greater purchasing power as average wage increases outpaced inflation last year.
How is the job market doing at the moment?
So far this year, the labor market has largely shrugged off high interest rates and falling but still high inflation, with average wage growth well above $200,000 per month.
But forecasters expect a gradual slowdown through the end of 2024 as borrowing costs and high prices further weigh on consumer and business demand. Low- and middle-income households are saddled with near-record credit card debt and historically high defaults, contributing to a recent decline in retail sales. And their pandemic savings are mostly depleted.
In May, job openings climbed to 8.1 million, the Labor Department said this week. That’s still above the pre-pandemic level of about 7 million but below the record 12.2 million recorded in March 2022, during severe labor shortages induced by COVID-19 and the job-hopping frenzy known as the Great Resignation.
Hiring has fallen below pre-pandemic levels.
Job growth has been remarkably resilient, but that’s largely because employers have been reluctant to lay off workers after the labor crisis. Jobless claims have edged up in recent weeks, however, and economists expect layoffs to pick up by year’s end, with average job growth coming in at just over 100,000.
Meanwhile, illegal immigration, which has also boosted job growth by increasing the supply of available workers, has slowed since March, Morgan Stanley wrote in a research note. That could also dampen job growth, particularly in sectors such as construction, restaurants and hospitality, the research firm said.
This article was originally published on USA TODAY: June jobs report: 206,000 jobs created last month
