US hiring was likely solid in June despite recession fears

WASHINGTON (AP) — U.S. employers likely downshifted their pace of hiring in June, but to a level that remains solid despite fears that the economy faces the growing risk of a recession.

On Friday, the Labor Department is expected to report that the nation gained 275,000 jobs last month, according to economists surveyed by the data provider FactSet. That would be the lowest monthly gain of the past year, during which the job market has sustained a vigorous recovery from the pandemic recession. Before the pandemic struck in early 2020, monthly hiring that large would have been seen as a robust gain.

The unemployment rate in June is thought to have remained at 3.6% for a fourth straight month, just above a 50-year low reached in 2019.

If the projections prove accurate, it will underscore the U.S. economy's unusual and seemingly contradictory circumstances. Growth has been negative for two straight quarters, consumers are slowing their spending with inflation at a four-decade high and home sales have fallen as the Federal Reserve has jacked up borrowing costs.

Yet many businesses are still scrambling to hire more people, with roughly two available jobs for every unemployed worker. And the number of people seeking unemployment benefits — a proxy for layoffs and an early indicator of a downturn — remains far below historic averages, although it has ticked up recently.

Still, hiring could weaken further in the coming months. The Fed wants job growth to slow, at least modestly, as part of its strenuous efforts to cool the economy and curb high inflation. The Biden administration, too, has sought to portray any pullback in hiring as part of a welcome transition to a more sustainable economy that will help keep inflation down.

Smaller monthly job increases “will be a sign that...