The report is welcome news for President Biden, whose term has coincided with 42 consecutive months of job creation. Employers have created The Biden administration has created more than 15 million jobs, with a monthly average of about 380,000. Recently, however, the pace of job creation has slowed to 220,000.
The most recent gains were concentrated in health care and public administration, which accounted for nearly 3 out of 4 jobs created in June. Construction, transportation and finance also added jobs, but job losses were seen in retail trade, manufacturing and professional and business services, a catch-all category that includes many white-collar jobs.
“There are many signs that we are seeing a slowdown in the economy,” said Kathy Bostjancic, chief economist at Nationwide Mutual. “We are seeing slowdowns across the board, but it is too early to tell at this point whether we are heading for a ‘soft landing’ or a harder, bumpier landing.”
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The June employment figures reflect a slowdown from May’s hiring, which the Labor Department revised significantly down to 218,000 new jobs, from 272,000 previously, the agency said. April’s was also revised down to just 108,000 jobs, from 165,000, the lowest figure since last October.
The gradual slowdown in the labor market could fuel hopes of a Federal Reserve rate cut in the coming months, reinforcing other signs of slowing hiring, job openings and wage growth.
“The labor market is still strong, but not as strong as it was a year ago,” said Gus Faucher, PNC’s chief economist. “If we see a slowdown in job growth, a slowdown in competition for workers, a slight decline in wage growth, that should help bring inflation back toward the Fed’s 2% target.”
Inflation, at 3.3%, has come down considerably from its peak of 9.1% two years ago, but it remains higher than the Fed would like. Wage growth in particular, which can push up prices, has been a major concern for the central bank.
Overall, wages rose 0.3% from May and 3.9% over the past year, further easing fears of a renewed surge in inflation. Fed Chairman Jerome H. Powell said this week that the labor market is “cooling appropriately.”
“It doesn’t look like it’s getting worse or that it’s going to be a major problem for inflation going forward,” Powell said at the European Central Bank’s annual policy meeting on Tuesday. “It looks like it’s doing exactly what you want it to do, which is calm down over time.”
Signs of a slowdown are mounting: Hiring in the service sector fell in June for the sixth time in seven months. And jobless claims rose again last week, the ninth straight increase, a sign that it’s taking longer for people to find work. Indeed, long-term unemployment (a measure of people who have been looking for work for more than six months) climbed in June, reaching its highest level in more than two years.
Marcelino Bautista applied for more than 100 jobs before landing one last month as a systems programmer for a grocery store in Hilo, Hawaii. The 31-year-old graduated from college in May after six years in the Marine Corps.
“Finding a job was more stressful than expected,” he said. “I applied to everything, even internships, but the competition was very tough.”
