Employment growth hits slowest pace for US since December 2020
by Zachary Halaschak, Economics Reporter |
July 07, 2023 08:32 AM
The economy added 209,000 jobs in June, the Bureau of Labor Statistics reported Friday, reflecting a slowdown in the labor market as the Federal Reserve tightens its monetary policy.
The unemployment rate fell slightly to 3.6%, still a very low figure historically.
Friday’s report is being closely scrutinized as it comes against the backdrop of several major economic stories — such as the Fed’s tightening, uncertainty in the housing market, fears of a recession, and lingering concerns about the banking system following the collapse of Silicon Valley Bank.
A weaker jobs report indicates that the Fed’s rate hikes are beginning to work and could add some credence to those who think the Fed’s interest rate target has gone as high as it should go.
The Fed paused its rate hikes following its June meeting — the first time it voted not to raise rates since it first started tightening back in March of last year. But Fed projections and remarks from Fed officials have made it clear that at least one more hike is likely, although it is yet to be seen how the central bank will react to the latest employment report.
The reading follows months of strong job gains, which is one part of the economy that President Joe Biden has touted even as inflation keeps eating into the paychecks of families across the country.
Despite the Fed’s efforts to slow commerce to bring down inflation, the unemployment rate has only ranged from 3.4% to 3.7% since March 2022, near the lowest rates of the past half-century.
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m 3.4% to 3.7% since March 2022, near the lowest rates of the past half-century.
