Job growth still strong, but slowing to 206,000 new jobs in June

Employers added 206,000 jobs in June, a gradual slowdown from the previous month and the latest sign that the U.S. economy is recovering after four years of dizzying growth.

Meanwhile, the unemployment rate edged higher to 4.1 percent, the highest level in more than a year and a half, the Bureau of Labor Statistics reported Friday. Unemployment among black workers and women rose slightly in June and was stronger among Asian workers.

The report is good news for President Biden, whose tenure has coincided with 42 months of consecutive job gains. Employers have more than 15 million jobs during the Biden administration, with a monthly average of about 380,000 positions. Recently, however, the pace of job creation has slowed to 220,000.

The latest gains were concentrated in health care and government, which accounted for nearly 3 of the 4 jobs created in June. Construction, transportation and finance also added positions, though jobs were lost in retail trade, manufacturing and professional and business services — a catch-all category that includes many white-collar positions.

“There is broad evidence that we are seeing a downturn in the economy,” said Kathy Bostjancic, chief economist at Nationwide Mutual. “We are seeing slowdowns across the board, but it is too early to tell right now whether we are headed for a ‘soft landing’ or a bumpy, harder landing.”


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The June jobs figures reflect a cooling of hiring in May, which the Labor Department revised down significantly to 218,000 new jobs from an earlier report of 272,000, the agency said. April was also revised down to just 108,000 new jobs, from 165,000, the lowest figure through October last year.

The gradual slowdown in the labor market could bolster hopes for a Federal Reserve rate cut in the coming months. This reinforces other signals of a slowdown in hiring, vacancies and wage growth.

“The labor market is still strong, but not as strong as it was a year ago,” said Gus Faucher, chief economist at PNC. “If we see a little bit slower job growth, a little bit of cooling in competition for workers, a little bit of less wage growth, that should help bring inflation back to the Fed’s 2 percent target.”

Inflation, at 3.3 percent, has fallen dramatically from a peak of 9.1 percent two years ago, but remains higher than the Fed would like. Wage growth, which can push up prices, is a particular focus for the central bank.

Overall, wages rose 0.3 percent from May and 3.9 percent over the past year, further easing concerns that inflation could flare up again. Fed Chairman Jerome H. Powell said this week that the labor market is “cooling appropriately.”

“It doesn’t look like it’s warming up or posing a big problem for inflation going forward,” Powell said Tuesday at the European Central Bank’s annual meeting. “It looks like it’s doing exactly what you want it to do, which is cool down over time.”

Those signs of cooling are mounting: Service sector employment fell for the sixth time in the seventh month in June. And jobless claims rose again last week, their ninth straight increase, in a sign that it’s taking longer for people to find jobs. The long-term unemployment rate — a measure of people who have been looking for work for more than six months — rose in June, to its highest level in more than two years.

Marcelino Bautista applied for more than 100 jobs before finally landing one last month, as a systems programmer for a supermarket in Hilo, Hawaii. The 31-year-old graduated from college in May after six years in the Marine Corps.

“Finding a job was more stressful than I expected,” he said. “I applied for everything, even internships, but it was extremely competitive.”

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