Businesses remain cautious about adding to their head counts
Employers added 57,000 jobs in June, less than half the previous month’s total, according to the Labor Department. The slowdown indicated that companies remain cautious about adding to their head counts.
The unemployment rate nevertheless fell to 4.2% from 4.3% in May. The decline was mostly attributable to people who were out of work giving up their job searches and no longer being counted as unemployed, according to the report.
Weekly unemployment-benefit filings provide a near-real-time indicator of layoffs and the health of the U.S. job market. Applications for the week ending Aug. 1 rose by 1,000 to 199,000, the Labor Department said.
The previous week’s figure was revised upward by 1,000 to 198,000. Even with that revision and the latest increase, layoffs remained in the historically low range of the past few years.
Inflation remains above the Federal Reserve’s target. The central bank’s preferred measure, PCE, came in at 3.7% for June, compared with the Federal Reserve’s 2% target.
Federal Reserve officials have said they are prepared to raise interest rates if inflation remains elevated. Higher rates would raise costs for businesses and could make companies less likely to hire.
The figures point to a labor market with low layoffs but fewer new jobs and continued inflation pressure. Workers are not losing jobs at a historically high rate, while people seeking work may face fewer new opportunities as businesses weigh higher costs.