Labor Market Remains Resilient
Employers across the U.S. added 147,000 jobs in June, with the labor market remaining resilient despite slowing economic growth this year. That figure is in line with the average monthly gain of 146,000 over the last year, according to the Labor Department.
The Numbers
Job growth was stronger than expected in June. Payroll gains sailed past the 115,000 predicted by economists polled by financial data firm FactSet. The nation’s unemployment rate fell to 4.1%, down from 4.2% in May and the lowest since February. The jobless rate came in below economist forecasts of 4.3%, according to FactSet.
What it Means
June’s employment data shows that the labor market remains solid even amid significant uncertainty over U.S. trade and fiscal policy. The upshot is that employers continued to add jobs at a steady pace. Government employment rose the most in June with 73,000 jobs added, driven by gains in the state and local government education sectors. The federal workforce continues to shed jobs, with 7,000 lost in June. Massive cuts in federal jobs by the Department of Government Efficiency earlier this year have gutted several key agencies. Outplacement firm Challenger, Gray & Christmas says these layoffs have accounted for nearly 287,000 cuts so far this year.
The health care sector added 39,000 jobs. The Labor Department also revised up its numbers for April and May by a collective 16,000, a further indication the job market remains on solid ground. While the labor market remains sturdy, economists expect growth to slow in the second half of the year. Federal Chair Jerome Powell has said tariffs could start to hobble economic activity and drive up inflation this summer.
What the Experts are Saying
Economists underlined that the labor market continues to persevere despite considerable economic uncertainty. "Today’s stronger jobs report confirms a still resilient U.S. labor market, defying, at least for now, the signs of weakness seen in some leading indicators," Simon Dangoor, head of fixed income macro strategies at Goldman Sachs Asset Management, said in a research note. The healthy level of job growth likely means the Fed will hold off cutting rates at its meeting this month, experts say.
Nancy Vanden Houten, lead U.S. economist at Oxford Economics, thinks U.S. inflation stemming from tariffs is likely to peak by the fourth quarter, giving the Fed room to lower rates in December to propel economic growth. "While there were some elements of softness beneath the better-than-expected headlines, the June employment report was strong enough to allow the Federal Reserve to keep policy on hold as it monitors the impact of tariffs on inflation," she said in a research note. Bret Kenwell, an investment analyst at eToro, said in an email that the latest job numbers could lead to a relief rally for U.S. stocks.
Conclusion
In conclusion, the labor market remains resilient, with employers adding 147,000 jobs in June. Despite economic uncertainty, the job market continues to grow, with the unemployment rate falling to 4.1%. Economists expect growth to slow in the second half of the year, but the healthy level of job growth may lead the Fed to hold off on cutting rates. As the economy continues to evolve, it’s essential to monitor the impact of tariffs and inflation on the labor market.
About the Author
Mary Cunningham is a reporter for CBS MoneyWatch. Before joining the business and finance vertical, she worked at "60 Minutes," CBSNews.com and CBS News 24/7 as part of the CBS News Associate Program.
