The economy added 372,000 jobs in June, a hotter-than-expected boost to the labor market that could ease worries of an impending recession but also complicate the job of the Federal Reserve as it seeks to quell inflation.
The unemployment rate was 3.6 percent, the same as a month earlier, the Labor Department said on Friday.
The number was in line with average growth over the past few months, including 368,000 in April and 384,000 in May. Employers have continued to compete for workers in recent months, with initial jobless claims rising only slightly from their low point in March.
The private sector has now regained its pre-pandemic job numbers, while the public sector remains 664,000 jobs below February 2020. Other than the public sector, no industry lost jobs in June, on a seasonally adjusted basis.
However, there is no guarantee that the rapid growth will continue indefinitely, as extremely high prices weigh on consumer spending. The labor force remains limited by aging demographics, low immigration rates and barriers to work that keep many people out of work.
“We weren’t going to sustain the employment growth that we’ve seen — it had to stop,” said Julian Richers, vice president of global economic research at Morgan Stanley. He said it will take some time to satiate America’s appetite for labor, however.
“There is still a lot of pent-up demand for workers,” Dr Richers said. “It makes sense that as the economy slows, employment should also slow once we deal with the pent-up labor demand.”
That lag is evident in the 11.3 million jobs that employers posted in May, a number that remains near a record high and leaves nearly two jobs available for every job seeker. In this equation, any workers laid off as certain sectors come under strain are likely to find new jobs quickly—at least for a while.
But a number of headwinds are creating a time constraint in this seller’s market for labor. Business leaders report that while domestic demand remains strong and some supply chain issues have eased, backlogs are no longer growing and savings accounts are shrinking. Whenever possible, employers automate tasks rather than hire new employees.
“Employers are becoming less concerned about filling these job postings as they watch the economy slow,” said Bill Adams, chief economist at Comerica Bank. “I would expect that businesses will probably be slow to fill open positions before they actually pull job postings.”
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