Hiring stayed strong in June despite persistent inflation and worries about a coming recession. Employers added 372,000 jobs, the Labor Department said Friday, surpassing the 270,000 economists had expected.
The unemployment rate remained at 3.6%, close to its pre-pandemic low.
“The U.S. labor market is defying gravity,” Becky Frankiewicz, chief commercial officer of ManpowerGroup, a staffing company, said in a note. “Hiring confidence remains strong for now as employers navigate tension between two narratives about the economy. Fears of a possible recession stoked by inflation and an aggressive Fed are eclipsed by the simple reality that employers can’t hire fast enough to meet demand.”
At the same time, the government’s report revised down early estimates for May and June to show 74,000 fewer jobs were created than initially thought. Wage growth slowed, with average pay increasing 5.1% year over year, showing the job market is cooling.
The figures complicate the Federal Reserve’s job of slowing inflation without plunging the country into a recession. The Fed has already embarked on its fastest series of rate hikes, and further large increases would making borrowing much costlier for consumers and businesses, increasing the risk of a recession.
The Fed may regard the June job gain as evidence that the rapid pace of hiring is feeding inflation as companies compete to attract workers.
Last month, Powell conceded the Fed’s rate hikes were likely to, and said that overseas factors, such as , which has elevated gas and food prices, will make it difficult to avoid a recession.
This is a developing story and will be updated. The Associated Press contributed reporting.