US slowed hiring but still added 209,000 jobs in June in sign of economy's resilience

WASHINGTON (AP) — America's employers pulled back on hiring but still delivered another month of solid gains in June, adding 209,000 jobs, a sign that the economy's resilience is confounding the Federal Reserve's drive to slow growth and inflation.

The latest evidence of economic strength makes it all but certain that the Fed will resume its interest rate hikes later this month after having ended a streak of 10 rate increases that have been intended to curb high inflation.

The June hiring figure reported by the government Friday is the smallest in 2 1/2 years. But it still points to a durable labour market that has produced a historically high number of advertised openings. The unemployment rate fell from 3.7% to 3.6%, near a five-decade low.

Most of the details in the report underscored the job market's durability. The length of the average work week edged up, a sign that customer demand is strong enough to keep employees busy. And wage growth accelerated: hourly pay is up 4.4% from a year ago. Wages are now growing faster than year-over-year inflation, which amounted to 4% in May.

The wage data may raise concerns at the Fed, which is worried that faster pay gains will perpetuate inflation by leading companies to raise prices to offset their higher labour costs. The Fed wants to see hiring and wage increases slow before halting its rate hikes.

"This is kind of a Goldilocks report," said Julia Coronado, president of MacroPolicy Perspectives, an economic research firm. "It's a resilient labour market — not too hot, not too cool."

Friday's data contained some evidence of a slower pace of hiring, which could reassure the Fed that the economy is moderating. Most of the job growth came from state and local governments, health care companies and private education, which together added 133,000 jobs. Because those sectors don't depend on robust consumer spending as much as the rest of the economy does, their hiring gains don't really reflect rising consumer demand — the main fuel for inflation.

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