US hiring cools in June, unemployment up slightly: govt

The US economy added 206,000 jobs in June, slowing from May but beating analyst expectations, according to government data. Photo: Michael M. Santiago / GETTY IMAGES NORTH AMERICA/Getty Images via AFP/File
Source: AFP

US job gains eased slightly in June while unemployment edged up, government data showed Friday, in the latest sign that the world's biggest economy is cooling as policymakers hope.

The country added 206,000 jobs last month, said the Labor Department, marking a slower pace of hiring than May's revised 218,000 figure.

But the gains still beat a Briefing.com consensus estimate of 185,000, signaling that the labor market remains relatively resilient.

The jobless rate ticked up from 4.0 percent to 4.1 percent.

Wage growth slowed from 0.4 percent in May to 0.3 percent last month. Compared with a year ago, the increase was 3.9 percent -- also easing from before.

Even as wage gains have outpaced consumer price inflation in recent times, this has not translated to rosy sentiment over the broader economy.

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This has added to President Joe Biden's challenges in convincing the public of his economic policies, on top of growing concern over his performance in a recent debate against former president Donald Trump, a Republican.

Congressman Brendan Boyle, top Democrat on the House Budget Committee, stressed on Friday in a statement that the jobs report "shows an American economy that is still roaring."

Gradual cooling

The latest report comes on the back of a slump in activity in the manufacturing and services sectors, alongside easing inflation.

While there is some way to go, these indicators could give the US central bank more confidence to begin cutting interest rates -- after holding them at a high level in recent months.

This move could, in turn, give the economy a boost.

Rubeela Farooqi, chief US economist at High Frequency Economics, expects the Federal Reserve could start talks about cutting rates at their next policy meeting.

They could lower the policy rate in September, if the data continue to show moderation, she said.

For now, she noted that even though wage growth has decelerated, the rates of change remain elevated compared to pre-pandemic trends.

"The labor market has cooled gradually for the past two years, and has arguably reached a sustainable new normal," ZipRecruiter chief economist Julia Pollak told AFP.

But significant slowing beyond the current pace of activity would likely stir alarm and raise the risk of "overcooling."

On the data's bearing on Fed policy, Pollak added: "The trend that matters most is continued disinflation in the various measures of consumer and producer prices."

"The second-most important trend is deceleration in wage growth," she said.

Source: AFP