The U.S. economy added 206,000 jobs in June, indicating a slight slowdown in the labor market, according to the latest data from the Bureau of Labor Statistics.
The figure was closely in line with economists’ expectations and represented a modest decline from the revised 218,000 jobs added in May.
The unemployment rate rose to 4.1% in June, the first time in more than two years that the jobless rate has exceeded 4%. The 0.1 percentage point increase from May suggests a gradual easing of labor market conditions.
Earlier reports this week had already pointed to a slowdown. Payroll processing firm ADP reported that private-sector employment grew by 150,000 jobs in June, down from 157,000 in May. Additionally, Challenger, Gray & Christmas, which specializes in executive rehiring, reported 48,786 job cuts in June, down from 63,816 in May but still up about 20% from June a year earlier.
The monthly jobs report, a key indicator for both Wall Street and policymakers in Washington, comes as the Biden administration faces challenges to public perception of its economic stewardship. Labor market resilience has been a flashpoint amid broader economic concerns.
Those employment numbers, along with upcoming inflation data, will be central to the Fed’s assessment of economic health and its interest-rate strategy. The Fed held interest rates at a two-decade high of around 5.3% last month as it sought to bring inflation down to its 2% target. Inflation was 3.4% in May, well below its June 2022 peak of 9.1% but still above the Fed’s target.
Minutes from the Fed’s latest policy meeting, released Wednesday, signaled a cautious approach, with officials awaiting “additional favorable data” before considering a rate cut. Fed Chair Jerome Powell earlier this week noted progress toward balancing the labor market, stressing the need for confidence in sustained inflation reduction.
The upcoming June inflation report, due out on July 11, and the Fed’s next meeting on July 30-31 will be crucial in shaping future monetary policy decisions.
