U.S. employers added 147,000 jobs in June. Job gains for April and May were revised up by a total of 16,000 jobs.
Michael M. Santiago/Getty Images North America
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Michael M. Santiago/Getty Images North America
Employers continued to hire at a solid pace in June, which could encourage the Federal Reserve to take its time in cutting interest rates.
U.S. employers added 147,000 jobs last month, according to a report from the Labor Department Thursday. That’s roughly in line with the average pace of hiring over the last 12 months. Job gains for April and May were also revised up by a total of 16,000 jobs.
The unemployment rate fell to 4.1%, from 4.2% in May, as 130,000 people dropped out of the workforce.
Job gains were concentrated in health care and state and local government last month, while the federal government continued to shed jobs, cutting 7,000 in June.
Factories shed jobs
Despite the healthy job gains overall, there are signs of weakness — especially in the manufacturing sector.
Factories cut another 7,000 jobs last month after cutting a similar number the month before. President Trump’s tariffs continue to weigh on the manufacturing sector. A report from the Institute for Supply Management this week showed factory activity shrank in June for the fourth month in a row. Many of the factory managers surveyed for the report blamed Trump’s import taxes for a drop in factory business.
“The tariff mess has utterly stopped sales globally and domestically,” said an unnamed purchasing manager quoted in the ISM report. “Everyone is on pause. Orders have collapsed.”
Fed may not need to cut rates
For the Fed, the narrow but consistent job gains suggest policymakers will not be a hurry to cut interest rates.
“We watch very carefully for signs of unexpected weakness” in the labor market, Fed chairman Jerome Powell said Tuesday during a central bankers’ panel in Portugal. “We see a gradual cooling but we don’t really see that yet.”
Powell and his colleagues do expect to lower their benchmark interest rate later this year. Trump has been critical of the Fed chairman for not moving more aggressively.
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