US added surprisingly strong 206K jobs last month, unemployment rose to 4.1%

The American job market added more jobs than was forecast last month while unemployment rose higher than expected — a mixed result for investors who were hoping for news that would encourage the Federal Reserve to slash interest rates in its drive to fully tame inflation.Nonfarm payrolls rose by 206,000 jobs in June while the unemployment rate ticked up to 4.1%.The report had been 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.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 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 sp...