WASHINGTON (AP) — The U.S. economy is emerging from a period of employment stagnation. something more dynamic?The Labor Department’s June job change report, released Thursday, will provide some important clues.
The report could show that 100,000 new jobs were added last month, according to a survey of economists by data provider FactSet. If so, it is Fourth consecutive month of strong employmentAfter a series of weak months from late last year to February, employers have actually quit one’s job. The unemployment rate is expected to remain low at 4.3% in June.
But some economists expect that number to rise further as companies adapt to a range of challenges, including higher tariffs, the Iran war and widespread AI investment, and grow more confident the economy will continue to grow. Employers added an average of 188,000 jobs a month in the three months from March to May, a sharp increase from an average loss of 4,000 jobs in the previous three months from December to February.
“It’s still a tough market, but it’s starting to calm down a little bit as we understand where things are going,” said Nicole Bashaw, labor economist at ZipRecruiter. “So companies can now execute their hiring plans.”
Still, the inflation rate is on the rise 4.2%, the highest level in three yearsrose due to rising gasoline prices, which eroded Americans’ incomes. Inflation-adjusted after-tax income in May was flat from a year earlier, which could discourage some consumers from spending.
But a healthy labor market that can continue to create jobs should allow many consumers, especially those on higher incomes, to remain resilient and spend more, boosting the economy.
But the Fed’s opponents of inflation are increasing pressure to raise rates to slow the economy and counter inflationary pressures. Now that gasoline prices are trending down due to the peace deal between the US and Iran, inflation should begin. cool And many Fed officials will want to see how close they can get to the Fed’s 2% target before raising rates.
Still, other officials say the strong job growth suggests the Fed’s key interest rate, currently about 3.6%, may not be holding back the economy or dampening inflation pressures.
Historically, an average of 188,000 job gains per month is not considered a large number. But as more Americans retire and new immigrants plummet, the U.S. labor force has barely grown. In that case, about 100,000 new jobs a month might be enough to maintain the unemployment rate or even lower it.
There are some wildcards that can affect June’s data. Employers added 172,000 jobs in May, 70,000 of which were in restaurants, bars and hotels. And local governments added 55,000 jobs. Both growth rates, especially for local governments, were higher than normal, and economists believe they are unlikely to be repeated.
Some analysts believe May job gains in restaurants and hotels will world cupstarted on June 11th. If so, large gains are unlikely to occur again. However, many economists say that while the World Cup may have caused job growth in host cities, it was not large enough to affect national data.
continuous recruitment artificial intelligence There are widespread concerns that many workers will be replaced and employment will decline. But so far, there have been no widespread layoffs due to the introduction of AI, and economists argue that it could make many workers more efficient at their jobs.
Bachaud said the adoption of AI may have facilitated the trends she noticed on websites. This means that while companies are increasingly posting job openings seeking more senior and experienced workers, job seekers are instead gravitating toward entry-level jobs.
Bashaw said far fewer people are quitting their jobs than right after the pandemic, and companies are having a harder time recruiting experienced talent from other industries. At the same time, this makes it difficult for inexperienced workers to enter the job market.
This gap “simply points to a mismatch between what employers are looking for and what today’s job seekers have to offer,” she says. This may be contributing to the dissatisfaction felt by many job seekers, even though the unemployment rate remains low.
