The labor market has remained surprisingly resilient as the Federal Reserve maintains two-decade high interest rates.
(The Hill) - The U.S. economy added 206.000 jobs in June, and the unemployment rate rose slightly to 4.1 percent, according to new Labor Department data released Friday.
The latest jobs numbers are are largely in line with expectations that the economy would add 190,000 jobs and maintain a jobless rate of 4 percent.
This follows a blockbuster report in May, which saw 272,000 jobs created but also marked the end of the unemployment rate’s longest sub-4 percent streak since the 1960s, as it ticked up slightly from 3.9 to 4 percent.
The Labor Department on Friday revised May's job gain down to 218,000 and April's job gain down to 108,000, meaning the economy added 111,000 fewer jobs than first reported.
The labor market has remained surprisingly resilient as the Federal Reserve maintains two-decade high interest rates as part of its effort to bring inflation back down to target.
After peaking at a 40-year high of 9.1 percent in June 2022, inflation has cooled significantly, falling to 3.3 percent as of May. However, it remains stubbornly higher than the central bank would like, dashing hopes of imminent rate cuts.
Fed Chair Jerome Powell has maintained in recent months that they need to see better inflation readings before beginning to ease interest rates from their current range of 5.25 to 5.5 percent.
“We want to be more confident that inflation is moving sustainably down toward 2 percent before we start the process of reducing how tight our policy is, of loosening policy,” he said Tuesday at an event in Portugal.
About two-thirds of traders now expect the first rate cut to come at the Fed’s September meeting, according to the CME FedWatch tool.
The state of the economy has been frequent thorn in President Biden’s side, as he prepares to face off against former President Trump in November’s election.
Despite significant improvements in inflation, a remarkably strong labor market and the lack of a once widely predicted recession, Americans’ views on the economy have remained gloomier than expected.
With just four months to go until Election Day, Biden and Trump are locked in a tight race, with the former president leading the sitting president by 0.7 percent, according to The Hill-Decision Desk HQ polling average.
Biden’s shaky debate performance has sent shock waves through the Democratic Party, leaving some questioning whether he should step aside.
