America’s employers added 372,000 jobs in June, a surprisingly strong gain that will likely spur the Federal Reserve to keep sharply raising interest rates to cool the economy and slow price increases.
The unemployment rate remained at 3.6% for a fourth straight month, the government said this morning, matching a near-50-year low that was reached before the pandemic struck in early 2020.
The steadily robust pace of hiring shows that many businesses still want to add workers to meet high customer demand—a trend that should dispel concerns that the U.S. economy might be on the verge of a downturn. With the nation gaining many additional jobs, more Americans are earning paychecks and are able to spend despite the highest inflation in four decades.
The past year’s streak of hiring has itself contributed to inflation and heightened pressure on the Fed to slow borrowing and spending. The central bank has already embarked on its fastest series of rate hikes since the 1980s. Additional large rate increases would make borrowing much costlier for consumers and businesses and increase the risk of a recession over the next year.
The Fed may regard the June job gain as evidence that the rapid pace of hiring is further feeding inflation as companies raise pay to attract workers and then increase prices to cover their higher labor costs. Many employers are still struggling to fill jobs, especially in the economy’s vast service sector, with Americans now traveling, eating out and attending public events with much greater frequency. Read more.
