The U.S. economy added 372,000 jobs in June, a hotter-than-expected boost to the labor market that may ease worries of an impending recession, but that also complicates the job of the Federal Reserve as it seeks to quell inflation.
The unemployment rate was 3.6%, the same as a month earlier, the Labor Department reported Friday.
The number is in line with the average gain over the past few months, including 368,000 in April and 384,000 in May. Employers have continued to compete for workers in recent months, with initial unemployment claims rising only slightly from their low point in March.
The private sector has now regained its pre-pandemic number of jobs, while the public sector remains 664,000 jobs below February 2020. Other than the public sector, no industry lost jobs in June, on a seasonally adjusted basis.
There is no guarantee that swift growth will continue indefinitely, however, as sky-high prices weigh on consumer spending. The labor force remains constrained by aging demographics, low levels of immigration and barriers to work that keep many people on the sidelines.
“We weren’t going to keep up the employment growth that we had been seeing — it needed to stop,” said Julian Richers, the vice president of global economics research at Morgan Stanley.
He said it would take a while, however, to exhaust America’s appetite for labor.
“There’s still a lot of pent-up demand for workers,” Richers said. “It does make sense that as the economy slows, employment should slow as well, once we’ve worked through the backlog of labor demand.”
That backlog is evident in the 11.3 million jobs that employers had open in May, a number that remains close to record highs and leaves nearly two jobs available for every person looking for work. In that equation, any workers laid off as certain sectors come under strain are likely to find new jobs quickly — for a time, at least.
But a number of headwinds are creating a time limit to that seller’s market for labor. Business leaders report that, while domestic demand remains strong and some supply chain issues have eased, order backlogs are no longer growing and savings accounts are shrinking. Whenever possible, employers are automating tasks rather than bringing on new employees.
“Employers are getting less anxious to fill those job postings as they watch the economy slow,” said Bill Adams, the chief economist at Comerica Bank. “I would expect that probably businesses will slow-walk filling open positions before they actually pull job postings.”
This article originally appeared in The New York Times.
By Lydia DePillis
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