Jobs report live updates: 209,000 jobs added as unemployment falls to 3.6%

Hiring slowed but remained sturdy in June as U.S. employers added 209,000 jobs despite inflation, high interest rates and nagging recession fears.

The unemployment rate fell from 3.7% to 3.6%, the Labor Department said Friday. That’s the highest since October.

Economists had estimated that 225,000 jobs were added last month.

How is the job market?

The labor market has defied predictions of a sharp slowdown in job growth for most of this year. It may be that industries such as leisure and hospitality are still catching up to their pre-COVID payroll levels, says Ian Shepherdson, chief economist of Pantheon Macroeconomics.

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Also, many companies have been reluctant to lay off skilled workers despite softer sales because it was so challenging to find the employees amid pandemic-related worker shortages. That has kept the monthly employment totals elevated even when hiring has slowed.

June was expected to serve up more solid job gains. Since the health crisis, the arrival of the student summer workforce has bolstered a labor pool that tends to shrink by May, Goldman says. Firms worried about labor shortages bring on workers early in the year for the busy spring sales season, the research firm says.

Earlier this week, private payroll processor ADP estimated that private employers added a blockbuster 497,000 jobs in June but its tallies have varied sharply from Labor’s more reliable survey.

Eventually, possibly within just a couple of months, economists expect the Fed’s sharp interest rate hikes to dampen borrowing, along with consumer and business spending, discourage hiring and spur more layoffs. That should trigger a mild recession later in 2023, many economists say.

So far, households have absorbed the blows of high interest rates and inflation in part because of some $2.6 trillion in COVID-related stimulus checks and other savings. But those cash reserves have fallen below $1.5 trillion and low- and middle-income consumers, in particular, have depleted their funds, says Mark Zandi, chief economist of Moody’s Analytics.

Americans are working fewer hours

In May, the typical workweek ticked down to 34.3 hours, over half an hour less than the average 35 hours clocked by workers in January 2021. That mirrored the number of hours worked right before the COVID-19 pandemic, a low surpassed only by the shrunken workweek experienced at the onset of the global health crisis in March, 2020, according to Labor Department data.

Economists and other experts say the pared down workweek is due in part to Americans wanting more flexible schedules and employers hesitating to cut positions despite the economy throttling down.

Is there a labor shortage

Worker shortages have largely ebbed, with many Americans pushed out by the COVID-19 pandemic back at work, and businesses slowing their hiring as they grapple with high interest rates and lingering worries about a possible recession.

The South, however, remains an exception. In that region, there were 2 million more jobs than potential employees in March, according to a review of Labor Department data by Moody’s Analytics. That mismatch was 13.8% lower than December but still historically high.

How do they determine the jobs report?

The jobs report, released monthly, is based on Department of Labor data.

What is the ADP jobs report?

Payroll processing firm ADP publishes a separate report that tracks private-sector job creation. ADP on Thursday said its survey showed employers added 497,000 jobs in June, nearly twice as many as analysts were expecting.