The US economy in June added 372,000 jobs, more than most forecasts and a sign the Federal Reserve may need to hold its course of steep rate hikes to weaken the economy and stem inflation running at four-decade highs.
Job gains last month exceeded forecasts that were generally in the 270,000 range and followed revised gains of 384,000 jobs in May. Unemployment held steady at 3.6pc for a fourth month, close to pre-pandemic levels, the Labor Department said today. Job gains in April and May were revised down by a combined 74,000 jobs from initial reports.
The stronger than expected labor market suggests the Fed may again hike its target lending rate by 0.75 percentage point when it meets later this month, repeating a June increase that was the first of such magnitude since 1994. The jobs market remains robust even as economists raise the odds or recession amid reports of slowing consumer spending and weakening factory and housing market activity.
Minutes of the Fed meeting in June showed policymakers recognized that hiking rates further would likely result in slowing growth and "tempering" of labor market conditions.
Total non-farm employment in June was down by 524,000, or 0.3pc, from February 2020, the last month before Covid-19 struck the country and eventually cost the country 22mn jobs.
Significant job gains during June occurred in professional and business services, leisure and hospitality, and health care.
Professional and business services added 74,000 jobs in June, while leisure and hospitality added 67,000 jobs, with food and drinking places adding 41,000 jobs. Employment in leisure and hospitality remains 1.3mn jobs below pre-pandemic levels.
Transportation and storage added 36,000 jobs in June, lifting employment in the sector to 759,000 jobs above pre-pandemic levels.
Manufacturing added 29,000 jobs and has returned to pre-pandemic levels.
Mining rose by 5,000 jobs in June, with gains of 2,000 in oil and gas extraction. Employment in the sector is up by 86,000 jobs from a recent low in February 2021.
Average hourly US earnings rose by 5.1pc in June from a year earlier.
By Robert Willis
