Economists Expect June Jobs Report to Show Cooling Labor Market

The June jobs report from the Labor Department is expected to show a slight slowdown in job growth, with economists predicting that about 200,000 roles were added last month, down from the 272,000 gained in May. Despite this cooling trend, the unemployment rate is expected to remain at a historically low level of 4% for the month of June.

Experts believe that the labor market is experiencing a “modulated cooldown,” with hiring remaining strong but gradually slowing down. Private-sector hiring data from ADP showed that only 150,000 roles were added in June, below expectations, with the leisure and hospitality industry driving much of the growth.

While the unemployment rate has remained low for over two years, there are signs of slowing growth in the labor market. Initial claims for unemployment benefits are trending higher, and ongoing unemployment claims have reached their highest level since November 2021. This could make it more challenging for individuals who lose their jobs to find new positions.

In addition to the labor market, the Institute for Supply Management reported a concerning Purchasing Managers Index survey for June, indicating contracting activity. Business activity is slowing down, which is also contributing to a cooling of inflation. Federal Reserve Chair Jerome Powell noted that risks to inflation and employment goals are becoming more balanced, raising concerns about the Fed’s high-interest rate strategy potentially impacting the economy.

Overall, while the June jobs report may show a slight cooldown in the labor market, experts believe it is not a crash but rather a natural adjustment as the economy continues to recover from the pandemic.