Employers across the United States added 147,000 jobs in June, showcasing the resilience of the labor market despite a slowing economy this year.
This job increase aligns closely with the average monthly gain of 146,000 over the past year, as reported by the Labor Department.
Job growth outpaced economists’ expectations, who had predicted a gain of only 115,000 jobs, according to a survey by financial data firm FactSet.
In a positive development, the nation’s unemployment rate fell to 4.1%, down from 4.2% in May, marking the lowest level since February.
This rate also came in below forecasts from economists, who had anticipated it to be at 4.3%.
The June employment figures indicate an ongoing strength in the job market against the backdrop of significant uncertainty regarding U.S. trade and fiscal policies.
Despite challenges, employers continued to add jobs at a consistent rate.
Government employment saw the most significant increase, with 73,000 jobs added, particularly in state and local government education sectors.
However, the federal sector experienced a decline, shedding 7,000 jobs, largely due to considerable cuts initiated by the Department of Government Efficiency, also known as DOGE.
This department’s layoffs have resulted in nearly 287,000 job cuts across several key agencies so far this year, according to outplacement firm Challenger, Gray & Christmas.
The health care sector contributed 39,000 jobs to the total in June, further demonstrating the labor market’s resilience.
Additionally, the Labor Department revised upward its job growth estimates for April and May, with a collective increase of 16,000 jobs, reinforcing signs of a solid job market.
Despite the strength in job growth, economists predict the economy may slow down in the latter half of the year.
Federal Reserve Chair Jerome Powell expressed concerns that tariffs could hinder economic activity and escalate inflation this summer.
During a recent gathering of central bankers in Portugal, Powell stated that the Fed has refrained from lowering interest rates this year primarily due to the tariffs imposed by President Donald Trump.
Economists emphasized that the labor market remains robust despite overarching economic uncertainties.
Simon Dangoor, the head of fixed income macro strategies at Goldman Sachs Asset Management, noted that the stronger jobs report reflects a resilient labor market, at least for the moment, amidst signs of weakness in some leading indicators.
Experts suggest that the healthy level of job growth is likely to influence the Federal Reserve’s decision to maintain interest rates in their upcoming meeting.
At their most recent meeting, the central bank indicated two potential rate cuts by year-end; however, predictions vary, with some economists forecasting just one cut.
Nancy Vanden Houten, the lead U.S. economist at Oxford Economics, anticipates that inflation due to tariffs is likely to peak in the fourth quarter, which could provide the Fed with the leeway to reduce rates in December to stimulate economic growth.
She remarked that while some aspects of the June employment data may hint at underlying softness, the overall report was robust enough to allow the Federal Reserve to keep its policies stable as it assesses the impact of tariffs on inflation.
Market reactions to the latest job numbers suggest a potential relief rally for U.S. stocks.
As reported, stocks rose slightly following the opening bell, although trading will be curtailed due to the early closure ahead of the July 4 holiday.
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