The American labor market produced another solid month of employment gains in June, the Labor Department reported on Friday. The economy added 206,000 jobs, while the unemployment rate was 4.1 percent, up from 4 percent the month before.
It was the 42nd consecutive month of job growth. But the unemployment rate surpassed 4 percent for the first time since November 2021.
Here’s what else to know:
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Wage growth cooled: Average hourly earnings rose 0.3 percent from the previous month, and 3.9 percent from a year earlier, compared with a 4.1 percent year-over-year change in May. Wages have been moderating since 2022, when earnings growth was routinely above 5 percent. But in good news for workers, those milder wage gains are now outpacing inflation.
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Job gains were unevenly spread: The strongest hiring increases were in government (70,000 jobs added in June), health care (49,000), social assistance (34,000) and construction (27,000). Many other industries produced scant increases, and a few, including manufacturing and retail, shed jobs last month.
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Previous months looked weaker: The overall gain for June was greater than most forecasts. But revisions for April and May showed weaker growth than reported earlier. April was restated at 108,000, from the previously reported 165,000, and May’s gain was put at 218,000, rather than 272,000.
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Markets were sanguine: The S&P 500 nudged higher, and bets that the Federal Reserve would begin cutting interest rates in September inched up slightly in response to the report. The two-year Treasury yield, which is sensitive to changes in rate expectations, fell to about 4.6 percent.
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The White House hailed the job gains: “We have more work to do, but wages are growing faster than prices and more Americans are joining the work force, with the highest share of working-age Americans in the work force in over 20 years,” President Biden said in a statement. But, he added, “too many Americans are still feeling squeezed by the cost of the living.”
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What economists said about the report: “These numbers are good numbers,” said Claudia Sahm, the chief economist for New Century Advisors. She added, however, that “the importance of the unemployment rate is it can actually tell us a bit about where we might be going” and noted that this rate “has been drifting up since 2023.”
