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July 7 (UPI) — The latest data from the U.S. Labor Department revealed an increase in hiring during June, although the overall gains over the first six months of this year were below the average for 2022.
In its report released on Friday, the Labor Department stated that total non-farm payrolls rose by 209,000 last month, primarily driven by new hires in government, healthcare, and construction. The rise in new hires could pose a concern for the Federal Reserve, which is aiming to slow down the economy through successive interest rate hikes. However, long-term data indicate that the Fed’s policy may be starting to have the desired effect.
According to the Labor Department, non-farm employment experienced an average monthly growth of 278,000 during the first half of 2023, which marks a decline from the monthly average of 399,000 jobs added in 2022.
President Joe Biden, who has been advocating for his administration’s economic policy known as “Bidenomics,” stated that the data released on Friday demonstrates that his plan is actively contributing to the economy, with a total of 13.2 million jobs added since he took office in 2021.
“That’s Bidenomics – fostering economic growth by creating jobs, reducing costs for hardworking families, and making strategic investments in America,” he remarked.
The unemployment rate of 3.6% remained relatively unchanged from the previous month in June. However, the number of people working part-time increased due to “slack work or business conditions.”
The hiring levels reported by the Labor Department were approximately half of what private payroll processor ADP reported for June. Nela Richardson, ADP’s chief economist, noted that wage growth was lackluster and suggested that hiring may have reached its peak.
Other indicators also support Richardson’s perspective. The Jobs Opening and Labor Turnover Summary (JOLTS) revealed a decline of 496,000 job openings in May, following an increase to 10.2 million in April.
On the other hand, the JOLTS report showed an overall increase in job separations, with quits – which serve as an indicator of willingness or ability to leave a job – rising by 250,000 to 4 million.
Lorie Logan, the head of the Federal Reserve Bank of Dallas, expressed concern on Thursday that new hires were surpassing expectations. She highlighted that new job openings are well above pre-pandemic levels, while layoffs remain low.
“There is no indication of a sudden deterioration in labor market conditions,” she stated.
This aligns with the testimony given last month by Federal Reserve Chairman Jerome Powell, who indicated that at least two more interest rate hikes may be necessary this year to slow down the U.S. economy.
“To put it concisely, I remain highly concerned about whether inflation will return to the target in a sustainable and timely manner,” Logan added. “I believe that more restrictive monetary policy will be required to achieve the Federal Open Market Committee’s objectives of stable prices and maximum employment.”
