ALBAWABA – The United States (US) economy is starting show signs of a cooling US labor market in June, with the growth rate slowing and underemployment rising, news agencies reported.
The economy added only 209,000 jobs in June, according to Reuters, citing the slowest growth rate in more than two years.
It is the smallest monthly increase in payrolls since the end of 2020, Bloomberg reported.
Meanwhile, the Labor Department's employment report, issued Friday, also showed 110,000 fewer jobs were created in April and May.
Hiring is also becoming more concentrated in specific sectors, as reported by Bloomberg.
Notably, the US labor market reflects the status of the economy, and inflation rates. The hotter the labor market, the higher the inflation.
“The job growth is slowing, but I don’t actually think that’s necessarily a bad thing,” Rucha Vankudre, senior economist for labor market analytics company Lightcast, told CNN. “In some ways this is great. We’re continuing to see the soft landing that we’re hoping for.”
Underemployment in the US labor market
The underemployment rate, a broader measure of labor-market slack than the headline unemployment rate, is at its highest level in almost a year, according to Bloomberg.
More Americans are reporting part-time jobs in June by the most since the immediate onset of the pandemic.
Despite some employers still struggling to attract and retain employees, keeping wage growth elevated, higher interest rates and dimmer economic outlooks are starting to weigh on the US labor market.
Temporary work in the US labor market
The number of temporary and contract workers on payrolls fell in June to the lowest level in almost two years, as cited by Bloomberg.
This is usually seen as a leading indicator of cooling in the US labor market, as temporary staff are often the first to be added when demand is picking up and the easiest to cut when growth is slackening.
Black unemployment in the US labor market
The jobless rate for Black Americans jumped to 6 percent in June, the highest level in almost a year, and these workers accounted for almost 90 percent of the increase in the number of unemployed Americans in the past two months.
Black workers are “often the first to lose jobs when demand for workers eases,” Julia Pollak, chief economist at ZipRecruiter Inc., told Bloomberg.
