US employers created fewer jobs in June than initially projected despite strong wage growth recorded in the month, the Bureau of Labor Statistics stated on Friday.
According to the report, nonfarm payrolls grew by 209,000 following downward revisions in the prior two months. While the unemployment rate fell to an impressive 3.6%, indicating a relatively healthy job market, the figures suggest that the labor market is losing some steam.
This slowdown can be attributed to concerns surrounding the economy’s prospects, including high interest rates and months of sluggish consumer spending.
Despite these concerns, the job market remains sufficiently healthy, with wage gains continuing at a brisk pace.
Average hourly earnings saw a monthly increase of 0.4%, surpassing the median estimate of 0.3%. Moreover, these earnings were up by 4.4% from the previous year.
This sustained growth in wages is likely to keep Federal Reserve policymakers on track to resume their series of rate hikes at their upcoming meeting later this month, following a pause in June.
The impact of these job market developments was reflected in the financial markets, with Treasury yields declining and stock-index futures fluctuating following the release of the figures. Investors are closely monitoring the labor market’s trajectory and its potential implications for the broader economy.
Looking at the sectors, hiring was concentrated in specific industries, including health care, government, and construction. On the other hand, payrolls experienced a decline in retail trade and transportation and warehousing, indicating a potential shift in job growth patterns.
The increase in average hourly earnings observed in June follows similar gains in the preceding two months, highlighting the consistent growth in workers’ wages. Also, the average workweek saw a marginal increase, further contributing to the overall positive outlook for employees.
