New Labor Department data released Friday showed the U.S. economy added 206,000 jobs in June, and the unemployment rate rose slightly to 4.1%.
The latest jobs report is broadly in line with expectations that the economy will add 190,000 jobs and keep the unemployment rate at 4%.
This follows a shocking report in May that 272,000 jobs were created and also showed the unemployment rate rose slightly from 3.9% to 4%, ending its longest streak of being below 4% since the 1960s.
The Labor Department on Friday revised down its May job gain to 218,000 and its April job gain to 108,000, meaning the economy as a whole added 111,000 fewer jobs than initially reported.
The labor market has held up surprisingly well as the Federal Reserve keeps interest rates at 20-year highs as part of its efforts to bring inflation down to its target.
Inflation has fallen sharply since hitting a 40-year high of 9.1% in June 2022, to 3.3% as of May. But inflation is still higher than the central bank would like, dashing hopes of a rate cut in the near future.
Fed Chairman Jerome Powell has argued in recent months that he needs to see improving inflation measures before he starts cutting interest rates from their current range of 5.25% to 5.5%.
“We want to have greater confidence that inflation is declining sustainably towards 2 percent before we begin the process of easing monetary tightening,” he said at an event in Portugal on Tuesday.
About two-thirds of traders currently expect the Fed to cut rates for the first time at its September meeting, according to the CME FedWatch tool.
The state of the economy has been a frequent concern for President Biden as he prepares to face off against former President Trump in the November election.
Despite a big improvement in inflation, a remarkably strong labor market, and the absence of the recession that was once widely predicted, Americans’ outlook on the economy remains gloomier than expected.
With just four months until Election Day, Biden and Trump are neck and neck, with the former president leading the incumbent by 0.7 percentage points, according to an average of polls from the Hill Decision Desk.
Biden’s shaky debate performance has sent shockwaves through Democrats, with some questioning whether he should step down.
