America's employers delivered another healthy month of hiring in June, adding 206,000 jobs and once again displaying the US economy's ability to withstand continually high interest rates. Last month's job growth did mark a pullback from 218,000 in May. But it was still a strong gain, reflecting the resilience of America's consumer-driven economy, which is slowing but still growing steadily, per the AP. Friday's report from the Labor Department also showed that the unemployment rate ticked up from 4% to a still-low 4.1%. And the department sharply revised downward its estimate of job growth for April and May by a combined 111,000.
Economists have been repeatedly predicting that the job market would lose momentum in the face of high interest rates engineered by the Fed, only to see the hiring gains show unexpected strength. Still, there are signs of an economic slowdown in the face of the Federal Reserve's series of interest rate hikes. The US gross domestic product—the total output of goods and services—grew at a lethargic annual pace of 1.4% from January through March, the slowest quarterly pace in nearly two years. Consumer spending, which accounts for about 70% of all US economic activity and which has powered the expansion the past three years, rose at just a 1.5% pace last quarter after growing more than 3% in each of the previous two quarters.
In addition, the number of advertised job openings has declined steadily since peaking at a record 12.2 million in March 2022. Still, while employers might not be hiring so aggressively after having struggled to fill jobs the past two years, they aren't cutting many, either. Most workers are enjoying an unusual level of job security. Meanwhile, inflation has steadily declined from a 9.1% peak in 2022 to 3.3%. The state of the economy is weighing heavily on voters' minds as the presidential campaign intensifies. Despite consistent hiring, relatively few layoffs, and gradually cooling inflation, many Americans have been exasperated by still-high prices and assign blame to President Biden. More here.
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