U.S. economy adds 372,000 jobs in sign of resilience
by Associated Press
The job market's recovery has been much more rapid after the pandemic recession than previous downturns.
America’s employers shrugged off high inflation and weakening growth to add 372,000 jobs in June, a surprisingly strong gain that will likely spur the Federal Reserve to keep sharply raising interest rates to try to cool the economy and slow price increases.
The unemployment rate remained at 3.6% for a fourth straight month, the government said on Jul. 8, matching a near-50-year low that was reached before the pandemic struck in early 2020.
The robust pace of hiring shows that businesses still want to add workers to meet high customer demand — a trend that should ease concerns that the U.S. economy might be on the verge of a downturn. The durability of the job market suggests that the economy remains on firm footing, at least for now.
“For all the doom and gloom that’s in the markets right now, companies themselves still seem pretty upbeat on their own progress,” said James Knightley, chief economist at ING, a bank. “It sort of dampens the near-term fear that we’re heading into an impending recession.”
Numerous sectors of the economy posted strong job gains in June. Health care added 78,000, transportation and warehousing 36,000 and professional services — a category that includes accounting, engineering, and legal services — gained 74,000. And a sector that includes mainly restaurants, hotels and entertainment jobs added 67,000.
Still, there is plenty of uncertainty clouding the economy’s future path. Economic growth has likely been negative for two straight quarters, consumers are slowing their spending with inflation at a four-decade high and home sales have fallen as the Fed has jacked up borrowing costs. Hiring could weaken in the coming months as the Fed’s rate hikes increasingly take effect.
And some companies are announcing layoffs, or have paused hiring. In particular, several large retailers, including Walmart and Amazon, have said they over-hired during the pandemic, with Walmart reducing its headcount by attrition.
Tesla is cutting about 3.5% of its total headcount. Netflix has laid off about 450 employees after it reported losing subscribers for the first time in more than a decade. The online automotive retailer Carvana and real estate companies Redfin and Compass have also announced job cuts.
Wages continued to grow in June, though at a slightly slower pace than they did earlier this year. More modest wage gains could help moderate inflation. Average hourly pay rose 5.1% to just above $32 last month, a much bigger increase than before the pandemic though not enough to keep pace with inflation. Wage growth is down from a 6% pace late last year.
The job market’s recovery has been much more rapid after the pandemic recession than previous downturns. The economy has now recovered all the private-sector jobs lost to the pandemic, a little over two years after the recession. It took almost five years to reach that level after the 2008-2009 downturn.
