- The US added 372,000 jobs in June, surpassing the average forecast of 268,000 new payrolls.
- The unemployment rate held at 3.6%, landing matching the median estimate.
- The report shows hiring slowing slightly as the country closes in on a full payroll recovery.
Hiring in the US slightly decelerated through June as the economy neared pre-pandemic employment levels.
The economy added 372,000 nonfarm payrolls last month, the Bureau of Labor Statistics said Friday. Economists surveyed by Bloomberg expected payrolls to climb by 268,000 in June. The gain reflects a mild slowdown from May's increase, which was revised to 384,000 from 128,000.
Job growth in April was updated to a final increase of 368,000 payrolls from 436,000.
The unemployment rate held at 3.6%, according to the report. Economists largely expected the rate to hold steady through the month. Unemployment has lingered at historic lows in 2022 as intense demand for labor leads most job seekers to quickly find work.
Job creation has generally tapered off from last year's historically fast pace partially due to higher interest rates. The Federal Reserve raised its benchmark rate by 0.75 percentage points in June, marking the first such hike since 1994. Higher rates make borrowing more expensive and tend to depress consumer demand. But while rising rates typically slow companies' hiring plans, intense demand for workers is expected to linger through the summer.
"The economy may be cooling off but hiring remains red hot," James Neave, head of data science at job search platform Adzuna, said. "Companies that can't find the staff to meet demand will likely keep hiring, even as prices rise and with the Federal Reserve threatening further interest rate rises."
Other data suggests higher rates and elevated inflation are biting into the biggest driver of economic growth. Americans' spending at stores and restaurants unexpectedly declined in May, marking the first drop in spending since December. Should retail sales continue to drop, lower revenues will probably lead firms to add jobs at a slower clip.
Job creation was also expected to slow as the economy crept closer to full employment, and the latest data shows the labor market nearly matching its pre-crisis health. The country is now just 524,000 payrolls away from the count it boasted in February 2020. Should hiring hold strong through July, it's likely the economy will return to its record-high job count by the end of the summer.
The mild slowdown is exactly what the Biden administration and the Fed want to see through the rest of 2022. The labor market is still rebounding at a strong pace despite the central bank's battle against inflation. The moderating growth rate also closes the gap between worker supply and employer demand. Fed Chair Jerome Powell has said in recent weeks that, while the Fed's rate hikes can't directly lower gas or food costs, it can address imbalances in the labor market.
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