US jobs report for June is likely to point to slower but still-solid hiring
WASHINGTON -- The American job market likely cooled last month while still remaining fundamentally healthy, which would be welcome news for the Federal Reserve in its drive to fully tame inflation.When the Labor Department issues the latest jobs report Friday, it’s expected to show that employers added 190,000 jobs in June — a solid gain, though down from a surprisingly robust 272,000 increase in May.The unemployment rate likely remained at a low 4%, according to forecasters surveyed by the data firm FactSet.From the Fed’s perspective, a deceleration in hiring to a still-decent pace would be just about ideal.
It would suggest that the job market is slowing enough to ease pressure on employers to sharply raise pay, which could feed inflation, yet not so much as to cause waves of layoffs.That said, economists 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.The economy has added a healthy average of 248,000 jobs a month so far in 2024.
That’s close to the 2023 average of 251,000, though down from the sizzling gains of 2022 (an average of 377,000 added jobs each month) and 2021 (a record 604,000) as the economy roared back from COVID-19 recession.“The labor market has really proven the doubters wrong,’’ said Andrew Flowers, chief economist at Appcast, which uses technology to help companies recruit workers.Still, Flowers suggested, the much higher borrowing costs caused by the Fed's rate hikes will eventually weaken the job market.“Eventually," he said, "it’s going to bend, but not break.The slow bite of high interest rates is going to moderate job growth.’’Already, there are signs of an economic slowdown.
The U.S.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, w...