While the decline shows a slight cooling, the labor market remains strong, and wage pressures are unlikely to ease.
Despite an unemployment rate of just 3.6% last month, The Labor Department’s Jobs Report of Friday, July 7, reported a seasonally adjusted 209,000 jobs in June, a decline from May’s gain of 306,000 jobs and below the 240,000 jobs that economists expected.
While the decline shows a slight cooling, the labor market remains strong, and wage pressures are unlikely to ease. This means that inflation is unlikely to ebb, which could result in another interest rate hike by the Federal Reserve toward the end of July. On June 13, following the Federal Reserve’s The Federal Open Market Committee (FOMC) meeting, Chair Jerome Powell said nearly all Committee members of the Fed’s chief body for monetary policy believe it is likely that some further rate increases will be appropriate this year to bring inflation down to its 2% target rate.
The Labor Department reported on July 6, a seasonally adjusted 9.8 million unfilled job openings in the U.S. on the last day of May. The demand for “high-touch workers” in service industries such as restaurants, hotels, cruise lines, nail salons, etc. remains high, and small business owners that are still looking for employees are likely paying more to get them, despite concerns about the possibility of a recession. At the same time, the Federal Reserve has shown little indication that interest rate hikes will cease.
