Associated Press
July 7, 2023
Christopher Rugaber
Washington — America’s employers pulled back on hiring but still delivered another month of solid gains in June, adding 209,000 jobs, a sign that the economy’s resilience is confounding the Federal Reserve’s drive to slow growth and inflation.
The latest evidence of economic strength makes it all but certain that the Fed will resume its interest rate hikes later this month after having ended a streak of 10 rate increases intended to slow inflation.
The June hiring figure reported by the government Friday is the smallest in 2½ years. But it still points to a durable labor market that has produced a historically high number of advertised openings. The unemployment rate fell from 3.7% to 3.6%, near a five-decade low.
Most of the details in the report underscored the job market’s durability. The length of the average work week edged up, a sign that customer demand is strong enough to keep employees busy. And wage growth accelerated: Hourly pay is up 4.4% from a year ago. Wages are now growing faster than year-over-year inflation, which amounted to 4% in May.
The wage data will likely raise concerns at the Fed, which is worried that faster pay gains will perpetuate inflation by leading companies to raise prices to offset their higher labor costs. The Fed wants to see hiring and wage increases slow before halting its rate hikes.