The latest sign of economic strength — a gain of 209,000 jobs last month — makes it certain the Federal Reserve will resume its interest rate hikes later this month after having ended a streak of 10 rate increases that were intended to curb high inflation
The June hiring figure reported by the government Friday is the smallest in 2 1/2 years but still pointed to a healthy labor market that has produced a historically high number of advertised openings. The unemployment rate fell from 3.7% to 3.6%, near a five-decade low.
Most of last month’s job growth came in three broad categories that are largely insulated from economic trends: State and local governments, health care providers and private education. Together, they added 133,000 jobs. Because those sectors don’t depend on robust consumer spending as much as the rest of the economy does, their hiring gains don’t really reflect rising consumer demand — the main fuel for inflation.
And wage growth accelerated: Hourly pay is up 4.4% from a year ago. Wages are now growing faster than year-over-year inflation, which amounted to 4% in May. And some companies are benefiting from the Biden administration’s spending on roads, water and sewer projects and other infrastructure work. Among them is Fehr Graham, an environmental engineering company based in Rockford, Illinois. CEO Mick Gronewold says he’s looking to fill at least 40 jobs at the 230-person company. The company designs water and wastewater projects, roads and industrial projects, mostly for cities and towns.
He estimates that his company has raised salaries 10%-15% just from a year ago to try to attract more job seekers. Friday’s report also showed the job market is moving toward a better balance between supply of workers and companies’ demand for them, a key objective for many Fed officials. After the economy emerged from the pandemic, the number of available jobsThe burgeoning demand for labor coincided with millions of Americans dropping out of the workforce to retire, avoid COVID, care for relatives or prepare for new careers.
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