(The Hill) — The U.S. added 209,000 jobs in June, according to the latest jobs report released by the Labor Department Friday morning, the smallest monthly jobs gain since December 2020.
Government, health care and social assistance saw the biggest gains, while other major industries saw little to no change.
The unemployment rate, which has ranged from 3.4% to 3.7% since March 2022, dipped slightly to 3.6%. But the number of people employed part-time for economic reasons jumped by 452,000 to 4.2 million in June, an early sign the job market could be cooling after a hotter-than-expected start to the year.
“The June Jobs Report was poised to be another blowout. Instead, it showed signs of the labor market cooling—perhaps the result of the Fed’s rate hikes finally biting,” Julia Pollak, chief economist at ZipRecruiter, said.
Government hiring leads the way
The government added 60,000 jobs in June, more than any other sector. State and local governments added 27,000 and 32,000 jobs, respectively.
In the first six months of 2023, the government has added an average of 63,000 jobs per month, more than twice the average of 23,000 per month in 2022 but still 161,000 below pre-pandemic levels.
Health care, social assistance post big gains
Health care added 41,000 jobs in June, in line with the average of 42,000 per month added so far in 2023 and similar to the average gain of 46,000 per month in 2022. Hospitals added 15,000 jobs, nursing and residential care facilities added 12,000 and home health care services added 9,000, while dental offices lost 7,000 jobs.
Friday’s job report also showed social assistance added 24,000 jobs, including 18,000 in individual and family services, in line with the 2022 monthly average of 19,000.
“The strongest private employment sector was health care and social assistance, which typically does well in a weak economy. Thus, the Fed has to see the writing of a slowing economy on the wall even though, as we normally say, one data point doesn’t a trend make,” Raymond James’ Chief Economist Eugenio Aleman said in a note.
Construction jobs keep rising
Construction added 23,000 jobs, surpassing the average of 15,000 per month added so far in 2023 and similar to the average of 22,000 per month in 2022.
Higher interest rates tend to hamper construction as companies feel the pinch of higher borrowing costs and pull back from expansion. But a May surge in new home construction may be powering the sector through headwinds.
Major industries show little or no change
Employment in other major industries showed little or no change from May to June, including manufacturing, wholesale trade, financial activities and mining, quarrying and oil and gas extraction.
Professional and business services saw little change in June, adding 21,000 jobs. The industry has added an average of 40,000 so far in 2023, down from 62,000 in 2022.
Leisure and hospitality also saw little change in employment for the third month in a row, adding 21,000 jobs in June. Employment in the industry, which was hit hard by the pandemic, lags behind pre-pandemic levels, 369,000 below its February 2020 level.
Retail employment lost 11,000 jobs in June, with little net change over the year. Employment in building material and garden equipment and supplies dealers was down 10,000 jobs and 5,000 in furniture, home furnishings, electronics and appliance retailers, while motor vehicles and part dealers added, 6,000 jobs.
“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,” Dave Gilbertson, labor economist at UKG, noted in an email. “Fundamentally, I’m not seeing any cracks in the foundation of the labor market.”
