Despite more than a year of consistent recession predictions, rising interest rates, and stubborn inflation, the labor market continues to prove its resilience. On Friday, government data revealed something like a Goldilocks jobs report to Wall Street investors who had been worried by a shocking data drop the day before. U.S. employers added 209,000 jobs in June, the Bureau of Labor Statistics (BLS) reported Friday. The figure missed economists’ consensus forecast for 230,000 new jobs and amounted to the smallest monthly gain since January 2021—but that was good news for traders who were jarred by Thursday’s ADP private payrolls report, claiming that 497,000 jobs were added to the private sector last month. The ADP data had sparked concerns that the Federal Reserve may need to keep raising interest rates in order to slow the economy and truly tame inflation. But Friday’s BLS report was the first time in 15 months that job growth has come in below economists’ expectations, and the experts argue that actually, that’s good news.
Dave Gilbertson, a labor economist at payroll processor UKG, said that although job growth “might not blow the doors off,” he still doesn’t see any “cracks” in the labor market, and the recent slowdown could enable the Fed to achieve a soft landing after all—where inflation fades without a job-killing recession. “The U.S. labor market moderated in June, as new job creation edged down—a step towards the much sought-after soft landing in the economy. Today’s report reinforced UKG’s assessment that the labor market is holding up very well, but it’s not on fire,” he said.
