The US job market showed signs of cooling in June 2024, with 206,000 new jobs added, down from a revised 218,000 in May. This figure exceeded most economists’ expectations, which ranged from 160,000 to 191,000. The unemployment rate rose to 4.1%, up from 4.0% in May, reaching its highest level since November 2021.Despite the slowdown, many economists still consider the labor market strong and resilient. The labor force participation rate increased slightly to 62.6%, up from 62.5% in May, indicating that more people are either employed or actively seeking work.Wage growth moderated to 3.9% year-over-year in June, down from 4.1% in May. This deceleration in wage growth, combined with the overall job market trends, is being closely watched by the Federal Reserve as it considers potential interest rate cuts later in the year.’The data is in line with expectations and shows a deceleration. Overall, the moderation of wage growth in the second quarter, combined with job growth and lower growth, are heading in the direction of a first rate cut this year,’ said Rubeela Farooqi, chief economist at HFE.The stock market reacted mildly to the news, with indexes initially rising before declining. The yield on two-year US Treasury notes, a sensitive indicator of monetary policy expectations, fell by almost 9 basis points to 4.65% after the release of the labor market data.These latest figures present a nuanced picture of the US economy, suggesting a gradual cooling that may allow the Federal Reserve to consider easing its monetary policy without risking a sharp economic downturn.
Key points
- US economy added 206,000 jobs in June 2024, exceeding expectations but showing signs of cooling.
- Unemployment rate rose to 4.
- Wage growth moderated to 3.
- Labor force participation rate increased slightly to 62.
1%, the highest since November 2021.
9% year-over-year, potentially influencing Federal Reserve’s interest rate decisions.
6%, indicating continued engagement in the job market.
Contradictions👾While most sources reported 206,000 jobs added in June, one source incorrectly stated this figure was for May.
👾There are slight discrepancies in the reported figures for May job creation, with some sources citing 218,000 and others 272,000.
