The numbers: The U.S. created a robust 372,000 new jobs in June, confounding predictions of a big slowdown in hiring and signaling the economy has some zip left despite growing talk of recession.
Economists polled by The Wall Street Journal had forecast 250,000 new jobs.
The unemployment rate was unchanged at 3.6%, the government said Friday, just a a tick above the pre-pandemic low.
The strong gain in employment in June is unlikely to last, however.
For one thing, the biggest shortage of labor in decades is unlikely to ease soon, making it hard for companies that still want to hire to do so.
The Federal Reserve is also sharply raising U.S. interest rates to try to reverse the worst outbreak of inflation in 40 years. Higher rates tend to slow the economy by making it more costly to buy a home or car or to take out a business loan.
The central bank wants to reduce the boiling-over labor market to a simmer. The labor crunch has boosted worker pay by the largest amount since the 1980s and helped families cope with rising prices, but it would be harder for the Fed to bring down inflation if rapid wage gains persist.
Hourly pay rose a solid 0.3% in June to $32.08, but wage growth has slowed. The increase in pay over the past year slipped again to 5.1% from 5.2% in May and 5.6% in the early spring.
In a potentially bad omen, the size of the labor force fell for the second time in three months. The labor force tends to stagnate when hiring slows or jobs become harder to find.
The share of the working-age population 16 or older who either have jobs or are looking for one slipped to 62.2% from 62.3%, leaving it well below the pre-pandemic peak.
Big picture: A smorgasbord of recent reports suggest the economy is slowing. It’s even possible the economy could shrink for the second quarter in a row — the typical definition of a recession.
Yet while many economists believe a recession is increasingly likely in the next year, they also say the U.S. is in OK shape for now.
Consumers are spending enough money to keep the wheels of the economy turning and businesses are still hiring and investing. Gas prices have also fallen recently and could give Americans temporary relief.
Key details: The increase in hiring in June was broad based.
Professional employment rose by 74,000 to lead the way. Some tech companies are holding the line on new hires, but other white-collar firms are still adding jobs.
Bars, restaurants, hotels and other companies in the hospitality business created 67,000 new jobs, reflecting pentup demand among consumers to go out again as the pandemic loses its grip on the routines of daily life.
Employment also rose by 57,000 in health care, 36,000 in warehousing and transportation and 29,000 in manufacturing.
The only decline in jobs took place in government, and it was a small one at that.
Market reaction: The Dow Jones Industrial Average
and S&P 500
were set to open lower in Friday trades. Stocks lost ground after the better-than-expected jobs report.