The economy added 372,000 jobs in June, a stronger-than-expected rebound in jobs that could ease worries of an impending recession but also complicates the Federal Reserve’s job as it seeks to quell inflation.
The jobless rate was 3.6 percent, unchanged from the month before, the Labor Department reported on Friday.
The figure represents the average gain over the past few months, including 368,000 in April and 384,000 in May. Employers have continued to scramble for workers in recent months, with initial jobless claims rising only slightly from their low in March.
The private sector has now regained its pre-pandemic job count, while the public sector remains 664,000 jobs below February 2020. With the exception of the public sector, no sector lost seasonally adjusted jobs in June.
However, there’s no guarantee the rapid growth will continue indefinitely as sky-high prices weigh on consumer spending. The labor force remains constrained by aging demographics, low levels of immigration and barriers to work that keep many people on the fringes.
“We didn’t want to sustain the job growth that we had seen — it had to stop,” said Julian Richers, vice president of global economic research at Morgan Stanley. He said it would take a while for America’s hunger for work to be exhausted, however.
“There is still a lot of pent-up demand for manpower,” said Dr. Richers. “It makes sense that as the economy slows, so should employment, once we’ve cleared the labor demand backlog.”
That backlog is reflected in the 11.3 million jobs employers had open in May, a number that remains near record highs and leaves almost two vacancies for every jobseeker. In this equation, any workers laid off when certain sectors come under pressure are likely to find new jobs quickly — at least for a period of time.
But a series of headwinds are creating a time limit on this seller’s job market. Business leaders are reporting that while domestic demand remains strong and some supply chain issues have eased, backlogs have stopped growing and savings accounts are shrinking. Wherever possible, employers automate tasks instead of hiring new employees.
“Employers are less concerned about filling these vacancies as they watch the economy slow down,” said Bill Adams, Comerica Bank’s chief economist. “I would expect companies to probably start filling vacancies slowly before actually pulling any vacancies.”