The report is good news for President Biden, whose tenure has coincided with 42 consecutive months of job gains. Employers have created more than 15 million jobs during the Biden administration, with a monthly average of about 380,000 positions. Recently, however, the pace of job creation has slowed to 220,000.
Recent gains were concentrated in health care and government, which accounted for nearly 3 in 4 jobs created in June. Construction, transportation and finance also added positions, although there were job losses in retail, manufacturing and professional and business services — an attractive category that includes many white-collar positions.
“There is broad evidence that we are seeing a shift in the economy,” said Kathy Bostjancic, chief economist at Nationwide Mutual. “We’re seeing slowdowns across the board, but it’s too early to say right now whether we’re headed for a ‘soft landing’ or a harder, harder landing.”
Grasp
Stories to keep you informed
The June jobs numbers reflect a slowdown from May’s hiring, which the Labor Department revised down significantly to 218,000 new jobs from a previous report of 272,000, the agency said. April was also revised down to just 108,000 job gains, down from 165,000, the lowest figure in October.
The gradual slowdown in the labor market could fuel hopes for a Federal Reserve rate cut in the coming months, reinforcing other signs of a slowdown in hiring, job postings and wage growth.
“The labor market is still strong, but not as strong as it was a year ago,” said Gus Faucher, chief economist at PNC. “If we see a little slower job growth, a little bit of cooling competition for workers, a little bit less wage growth, that should help bring inflation back to the Fed’s 2 percent target.”
Inflation, at 3.3 percent, has fallen dramatically from its peak of 9.1 percent two years ago, but remains higher than the Fed would like. Wage growth in particular, which can push up prices, has been a key focus for the central bank.
Overall, wages rose 0.3 percent from May and 3.9 percent last year, further easing concerns that inflation could reignite. Fed Chairman Jerome H. Powell said this week that the labor market is “cooling down properly.”
“It doesn’t look like it’s heating up or posing a big problem for inflation going forward,” Powell said at the European Central Bank’s annual meeting on Tuesday. “It looks like it’s doing exactly what you’d want it to do, which is cool over time.”
These signs of cooling are piling up: Employment in the service industry contracted in June for the sixth time in seven months. And jobless claims rose again last week, the ninth straight increase, in a sign that people are taking longer 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 to its highest level in more than two years.
Marcelino Bautista applied for more than 100 jobs before finally 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 I expected,” he said. “I applied for everything, even internships, but it was extremely competitive.”