US nonfarm payrolls rise to 2.09 lakh in June even as overall jobs growth declines; unemployment rate falls to 3.6%

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unemployment rate retreating from a seven-month high and fairly strong wage gains continuing. Nonfarm payrolls increased by 209,000 jobs last month, the Labor Department said in its closely watched employment report on Friday. Data for May was revised lower to show payrolls rising 306,000 instead of 339,000 as previously reported.

According to a poll conducted by news agency Reuters, economists had forecast payrolls rising 225,000. The economy needs to create 70,000-100,000 jobs per month to keep up with growth in the working-age population. The unemployment rate slipped to 3.6% from 3.7% in May.

Though job growth is slowing, the labor market remains unbowed despite the Federal Reserve delivering 500 basis points worth of rate hikes since March 2022 when it embarked on its fastest monetary policy tightening campaign in more than 40 years. For now, it is helping the economy to defy economists' predictions of a recession. Average hourly earnings rose 0.4% last month after climbing by the same margin in May.

In the 12 months through June, wages increased 4.4%, matching May's advance. Annual wage growth remains too high to be consistent with the Fed's 2% inflation target. The U.S.

central bank is almost certain to resume raising interest rates later this month as signaled by Fed Chair Jerome Powell, after pausing in June. While the higher paying industries like technology and finance are purging workers, sectors like leisure and hospitality as well local government education are still catching up after losing employees and experiencing accelerated retirements during the COVID-19 pandemic. Companies are also hoarding workers, a legacy of the dire labor shortages experienced as the economy rebounded from the COVID-19 downturn