US Job Growth Slows, but Wage Gains Remain Strong
July 07, 2023: US Job Growth Slows, but Wage Gains Remain Strong
The US job market showed moderation as nonfarm payrolls increased by 209,000 jobs in June, falling short of economists’ expectations. However, the unemployment rate decreased to 3.6%, indicating tight labor market conditions. Despite the slight slowdown, wage growth remained robust, with average hourly earnings rising by 0.4% in June and 4.4% year-on-year.
The data suggests that while the labor market is cooling down, it is still strong compared to historical standards. This resilience in job growth challenges the Federal Reserve, as it aims to curb inflation by raising interest rates. The solid wage gains further support the central bank’s plan to proceed with a rate hike later this month.
The report also revealed revisions to job numbers in previous months, indicating that higher borrowing costs are starting to impact businesses’ hiring decisions. Additionally, there was an increase in the number of people working part-time due to reduced hours or slack work conditions. However, the overall pace of job creation remains significant and dispels concerns of an imminent recession.
While the job market shows signs of moderation, it remains uncertain how much further the Federal Reserve will raise interest rates beyond the upcoming rate hike. Investors and market participants are closely watching for signals from the central bank regarding its future monetary policy decisions.
- Nonfarm payrolls increased by 209,000 jobs in June, slightly below economists’ expectations.
- The unemployment rate fell to 3.6%, indicating tight labor market conditions.
- Average hourly earnings rose by 0.4% in June and 4.4% year-on-year, reflecting strong wage growth.
- The Federal Reserve is likely to proceed with a rate hike this month, considering the solid wage gains and overall job market resilience.
- While job growth has moderated, it remains strong compared to historical norms and dispels concerns about impending recession.
- Revisions to previous job numbers suggest that higher borrowing costs are starting to impact businesses’ hiring decisions.
- The market closely monitors the Federal Reserve’s future policy decisions beyond the upcoming rate hike.