Key facts
- U.S. job growth is projected to have slowed in June.
- The unemployment rate is expected to remain at 4.3%.
- Economists forecast around 100,000 new jobs were added in June.
- Average hourly earnings are forecast to rise 3.5% year-on-year.
- Inflation is at a three-year high of 4.2%.
U.S. job growth is expected to have cooled in June, with economists forecasting around 100,000 new jobs added. The unemployment rate is anticipated to remain steady at a low 4.3%. This figure represents a slowdown from the average monthly gains of 188,000 seen between March and May.
Despite challenges like higher tariffs and widespread AI investment, some economists are optimistic about the economy's dynamism. Labor economist Nicole Bachaud noted that businesses are executing hiring plans as market outlooks have stabilized. Average hourly earnings are projected to increase by 3.5% year-on-year.
May's job gains of 172,000 were boosted by hiring in the hospitality sector and local governments, which may not be repeatable. While AI adoption is a concern, it has not yet caused widespread layoffs and may enhance worker efficiency. However, a mismatch persists between employers seeking experienced workers and job seekers focusing on entry-level positions, creating recruitment difficulties.
Inflation remains elevated at a three-year high of 4.2%, impacting consumer incomes. The Federal Reserve faces pressure to address inflation, with solid job growth potentially signaling that current rates are not sufficiently restraining the economy.