Updated figures released Fridayshow the U.S. job market remaining strong despite thoughts earlier in the year that 2023 would bring a recession, but is cooling compared to past months.
According to the new data, the U.S. added 209,000 jobs in June, decreasing the unemployment rate to 3.6%. Employment in the government, health care, social assistance and construction fields trended up in June. The U.S. unemployment rate remained near a five-decade low for the last 14 months.
But the number of jobs added in June was down from recent averages. Employment has grown by an average of 278,000 per month over the first six months of 2023, which is lower than the average of 399,000 per month in 2022.
There are also signs workers are getting more spending power. Over the last year, hourly wages have increased by 4.4%, according to the Bureau of Labor Statistics. As of May, the consumer price index showed price increases of 4%. At its peak, the consumer price index exceeded 9%.
The Federal Reserve has said its goal is to get inflation down to a normalized rate of 2%. Fed Chair Jerome Powell said one key to that happening is to get wage growth to subside.
Unemployment and job growth are factors the Federal Reserve considers when deciding to raise interest rates. Raising interest rates generally causes the economy to cool, meaning job losses are expected.
Although workforce participation is below pre-pandemic levels, it has increased by 0.4 percentage points in the last year to 62.6%.
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