Hiring eased slightly in June as the US economy added 209,000 jobs, according to the US Labor Department.
The latest figures shown in the Bureau of Labor Statistics June report, released Friday, mark a decrease from the robust 339,000 jobs that were gained in May.
Unemployment was little changed month-over-month, from 3.6% from 3.7% — still slightly above the five-decade low of 3.4%.
Economists had forecast 240,000 new jobs in June with employment dropping to 3.6%, according to the Wall Street Journal.
Employment in state government increased the most, rising by 60,000 in June. Jobs in health care, social assistance, and construction also trended positively, the report showed.
Companies have not drastically slowed hiring despite the central bank’s efforts to fix the tight job market with 10 consecutive interest rate hikes before deciding to keep rates unchanged in June.
Federal Reserve staff reportedly wrestled with data showing job openings are plentiful before ultimately agreeing to hold interest rates steady, at 5% to 5.25%, in June as a way to buy time and assess whether further hikes would be needed.
However, the labor market’s ongoing strength fans fear that more aggressive hikes are pending as part of the central bank’s fastest monetary policy tightening campaign in more than 40 years to stamp out inflation — which still remains well above the Fed’s 2% goal.
Fed officials have said they think strong hiring can often fuel inflation if companies feel compelled to raise pay to attract and keep workers.
Thus, a slowdown in job growth and pay raises could help the Fed reach its 2% inflation target.
“Inflation pressures continue to run high, and the process of getting inflation back down to 2% has a long way to go,” Fed Chair Jerome Powell told a House committee last month.
“We don’t see any softening in the labor market,” said Brad McMillan, chief investment officer for Commonwealth Financial Network. “The Fed doesn’t have to worry about the jobs market. When you look at their mandate, they have no reason not to keep hiking and to keep hiking for a while.”
Before the federal government released the June report, Wall Street’s main indexes tumbled on Thursday in a broad selloff after the ADP National Employment report showed that private payrolls increased more than expected in June.
The Dow Jones Industrial Average, which had plummeted 500 points earlier, fell 366.38 points, or 1.1%, to 33,922.26. The Nasdaq and S&P 500 each dropped 0.8%.
The ADP report, which is viewed as a proxy for US hiring activity, showed that the private sector added 497,000 jobs last month — massively above what the Bureau of Labor Statistics showed.
Economists polled by Reuters, meanwhile, had forecast private payrolls were likely to increase by 200,000 jobs in June.
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