Job growth in the US slowed after a sharp surge in the previous month, exceeding expectations, but the labor market remains tense. The unemployment rate has fallen from a seven-month high, and strong wage growth continues. The Ministry of Labor in its Non-Farm Payrolls report reported that the number of people employed in the non-agricultural sector increased by 209 thousand jobs last month. The data for May were adjusted down to an increase in employment by 306 thousand instead of the previous estimate of 339 thousand. Economists on average predicted an increase in the number of employed by 225 thousand people. To maintain the growth rate of the working-age population, it is necessary to create from 70 to 100 thousand new jobs every month. The unemployment rate dropped from 3.7% to 3.6%. And while job growth is slowing, the labor market remains resilient despite the Fed raising interest rates by 500 basis points since March 2022. The average hourly wage increased by 0.4% last month, and over the past 12 months it has increased by 4.4%. However, annual wage growth is still too high to meet the Fed's 2% inflation target. In this regard, the US Central Bank is likely to resume raising interest rates later this month.
