Jobs report: U.S. labor market beats expectations with healthy rate of hiring in June
Jobs report: U.S. labor market beats expectations with healthy rate of hiring in June
U.S. employers added 147,000 jobs in June as the American labor market continues to show surprising resilience despite uncertainty over President Donald Trumpâs economic policies. The unemployment rate ticked down 4.1% from 4.2% in May, the Labor Department said Thursday.Hiring rose modestly from a revised 144,000 in May and beat economists expectations of fewer than 118,000 new jobs and a rise in the unemployment rate.The U.S. job market has cooled considerably from red-hot days of 2021-2023 when the economy bounced back with unexpected strength from COVID-19 lockdowns and companies were desperate for workers. So far this year employers have added an average 124,000 jobs a month, down from 168,000 in 2024 and an average 400,000 from 2021 through 2023.Hiring decelerated after the Federal Reserve raised its benchmark interest rate 11 times in 2022 and 2023. But the economy did not collapse, defying widespread predictions that the higher borrowing costs would cause a recession. Companies kept hiring, just at a more modest pace.But the job market increasingly looks under strain. A survey released Wednesday by the payroll processor ADP found that private companies cut 33,000 jobs last month. âThough layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month,â said ADP chief economist Nela Richardson. (The ADP numbers frequently differ from the Labor Departmentâs official job count.)Employers are now contending with fallout from Trumpâs policies, especially his aggressive use of import taxesâtariffs.Mainstream economists say that tariffs raise prices for businesses and consumers alike and make the economy less efficient by reducing competition. They also invite retaliatory tariffs from other countries, hurting U.S. exporters.The erratic way that Trump has rolled out his tariffsâannouncing and then suspending them, then coming up with new onesâhas left businesses bewildered.Manufacturers responding to a survey released this week by the Institute for Supply Management complained that they and their customers were reluctant to make decisions until they understood where Trumpâs tariffs would end up. âThat whiplash has to stop and it has to stay stopped,â said Susan Spence, chair of the ISMâs manufacturing survey committee.Trumpâs assault on the federal bureaucracy could also show up in Juneâs job report. Nancy Vanden Houten, lead U.S. economist at Oxford Economics, expects federal jobs dropped by 20,000 last month, âreflecting a hiring freeze, voluntary quits and retirements.â For now, she wrote in a commentary Wednesday, court rulings âhave put massive federal layoffs on hold.âThe presidentâs deportationsâand the threat of themâalso are likely to start having an impact on the job market by driving immigrants out of the job market. In May, the U.S. labor forceâthose working and looking for workâfell by 625,000, the biggest drop in a year and a half. âPaul Wiseman, AP Economics Writer
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