WASHINGTON–The U.S. economy added 206,000 jobs in June, marking another solid month for employment, while at the same time sending signals that may lead to Fed to consider reducing rates this year, according to analysts.
It was the 42nd consecutive month of job growth
The new report from the Labor Department shows the unemployment rate was 4.1%, up from 4% the month before, the first time the unemployment rate surpassed 4% since November 2021.
‘Moderation’ Can be Seen
"The economy added 206,000 jobs in June but the report showed more moderation in the labor market than previous reports,” said America’s Credit Unions’ Senior economist Dawit Kebede. “Job gains in the prior two months were revised down by 111,000, unemployment ticked up to 4.1%, and average hourly earnings increased by a slower pace of 3.9% over the past 12 months. This relative softness in the labor market is encouraging news for the Federal Reserve searching for data signals to loosen a tight monetary policy."
As the Wall Street Journal further noted in its analysis, the “report provides further evidence that the labor market appears to have come into better balance. A hot labor market makes it more difficult to lower rates, while the central bank is also mandated to keep the job market as strong as possible without triggering inflation.”
High interest rates take time to fully work their way into the economy, but lately they have more clearly damped activity, the analysis added.
Fed Chair Offers View
Earlier this week, during a panel discussion with other central bankers in Portugal, Federal Reserve Chair Jerome Powell said, “Frankly, because the U.S. economy is strong and the labor market is strong, we have the ability to take our time and get this right.”
Job growth continues to be driven by three sectors: healthcare, government and leisure, according to the Labor Dept. data.