America’s employers pulled back on hiring but still delivered another month of solid gains in June, adding 209,000 jobs, a sign that the economy’s resilience is confounding the Federal Reserve’s drive to slow growth and inflation.
Another month, another solid gain for America’s job market.
Employers in the United States slowed their hiring in June yet still produced a healthy increase, further evidence of an economy that has defied persistent forecasts of a recession.
The pace of hiring by businesses and government agencies — 209,000 added jobs last month — was the smallest monthly gain in 2 1/2 years. But it was enough to reduce the unemployment rate from 3.7% to 3.6%, near a half-century low.
The latest evidence of economic strength makes it all but certain that the Federal Reserve will resume its interest rate hikes later this month, ending a streak of 10 rate increases that were intended to curb high inflation.
Yet there were also signs in Friday’s government report that the job market is cooling to a more sustainable pace of growth — a trend that, if sustained, could reassure the Fed that its rate hikes are cooling inflation pressures without derailing the economy.
“This is kind of a Goldilocks report,” said Julia Coronado, president of MacroPolicy Perspectives, an economic research firm. “It’s a resilient labor market — not too hot, not too cool.”
WHY IS HIRING SO CONSISTENT?
The economy has been beset by high interest rates, elevated inflation and nagging worries about a possible recession resulting from the Fed’s efforts to quell price increases.
Yet several factors are countering those headwinds and perpetuating hiring, which typically boosts consumer spending and propels the economy.
Industries that are typically sensitive to rising borrowing costs — such as housing and car sales — appear to have adjusted to the Fed’s higher rates. To take one example: Mortgage rates have nearly doubled since the Fed began raising borrowing costs 15 months ago.
