U.S. employers added 206,000 jobs in June as employment held steady despite persistent inflation and high interest rates.
But the employment picture was mixed at best, with job growth for April and May revised down a hefty 111,000 and the private sector adding a disappointing 136,000 jobs.
The unemployment rate, which is calculated based on a separate survey of households, also rose to 4.1% from 4%, the highest rate since November 2021, the Labor Department said Friday.
Economists polled by Bloomberg estimated that 195,000 jobs were added last month.
The labor market in the spring was clearly less optimistic than expected. Wage growth was revised down from 165,000 to 108,000 in April and from 272,000 to 218,000 in May.
What is the current state of the labor market?
The labor market has largely left high interest rates and declining but still high inflation behind it so far this year, with job growth averaging more than 200,000 per month.
But forecasters expect a gradual slowdown through late 2024 as high borrowing costs and prices take a greater toll on consumer and business demand. Low- and middle-income households are struggling with near-record credit card debt and historically high delinquency rates, contributing to a recent slump in retail sales. And their pandemic-related savings have largely dried up.
Job openings rose to 8.1 million in May, 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 set in March 2022 amid severe COVID-related labor shortages and the job-hopping frenzy known as the Great Layoffs.
The number of vacancies is below pre-pandemic levels.
While job growth has been remarkably resilient, that’s largely because employers have been reluctant to lay off workers in the wake of the labor market downturn. However, jobless claims have risen modestly in recent weeks, and economists expect layoffs to pick up toward the end of the year as average job growth has slowed to just over 100,000.
Meanwhile, unauthorized immigration, which has also fueled job growth by increasing the supply of available workers, has slowed since March, Morgan Stanley wrote in a research note. That too could limit job growth, particularly in sectors such as construction, restaurants and hotels, the research firm said.
This article originally appeared on USA TODAY: June Jobs Report: 206,000 Jobs Added Last Month
