You can relax about a potential recession, at least for today, as June’s job report came in better than many expected.
The U.S. economy added 372,000 jobs in June, the Labor Department reported today, higher than the 250,000 gain that economists had forecast. While job growth slowed from the revised May increase of 384,000, the number confirms that the labor market remains strong, even as the Federal Reserve considers raising interest rates again and Americans worry about a potential recession.
- Nonfarm payrolls rose by 372,000 in June, defying expectations of a 250,000 increase.
- The unemployment rate was unchanged at 3.6% for the fourth consecutive month.
- Wage growth continued to be lower than inflation, rising 5.1% in June compared to May’s annual inflation rate of 8.6%.
- Job gains were strongest in the professional and business services, leisure and hospitality, and health care sectors.
The unemployment rate remained unchanged at 3.6%, in line with expectations, and now sits just above the pre-pandemic unemployment rate of 3.5%.
The June jobs report is an important one as it strengthens the Fed’s case that the U.S. economy is strong enough to handle more interest rate hikes to fight rising inflation.
With the labor market continuing to go strong, you can expect that not only will more rate hikes be coming in the future, but they will likely be aggressive, making the cost of loans even more expensive. But while you might not appreciate higher interest rates when borrowing, the strong jobs report should help soothe any worries about an impending recession.
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