The report is good news for President Biden, whose term coincides with 42 consecutive months of job growth. More than 15 million jobs have been created under Biden, averaging about 380,000 jobs per month, but the pace of job creation has recently slowed to 220,000.
The recent job gains were led by new jobs in local and state government, health care, social assistance and construction, but retail trade and professional and business services — a catch-all sector that includes many white-collar jobs — saw job losses.
The Labor Department said the June employment report reflected a decline in employment in May and revised its figure sharply downward to 218,000 from the 272,000 it had initially reported.
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A gradual slowdown in the labor market could raise expectations that the Federal Reserve will cut interest rates in coming months and reinforce other signs of slowing hiring, job offers and wage growth.
“The labor market remains strong, but not as strong as it was a year ago,” said Gus Faucher, chief economist at PNC. “If job growth slows a little, competition for workers cools a little and wage growth slows a little, inflation should move back toward the Fed’s 2% target.”
Inflation is at 3.3%, down significantly from a peak of 9.1% two years ago but still higher than the Fed would like, especially as wage growth, which drives price increases, is a key focus for the central bank.
Overall, wages have risen 0.3% since May and 3.9% over the past year, further easing concerns that inflation may be rising again. Federal Reserve Chairman Jerome H. Powell said this week that the labor market is “moderately cooling.”
“It doesn’t look like we’re going to see interest rates rise or cause any major problems for inflation going forward,” Powell said at the European Central Bank’s annual meeting on Tuesday. “It looks like we’re moving in exactly the direction we want, which is for interest rates to stabilize over time.”
These signs of a slowing economy are piling up: Service industry employment fell for the sixth of seven months in June, and jobless claims rose again last week for the ninth straight month of increases, a sign that people are having a harder time finding work.
Marcelino Bautista applied to more than 100 jobs before finally finding work last month as a systems programmer at a grocery store in Hilo, Hawaii. Mr. Bautista, 31, graduated from college in May after serving six years in the Marines.
“The job search was a lot more stressful than I expected,” he says. “I applied to everything, including internships, and it was very competitive.”