BUSINESS + ECONOMY

US employers add a still-solid 187,000 jobs in June; unemployment dips to 3.5%

Aug 4, 2023, 8:22 AM

WASHINGTON (AP) — U.S. employers added 187,000 jobs last month, fewer than expected, as the highe...

File - Driver Jose Viveros delivers beverages in the Little Tokyo district of Los Angeles, Thursday, July 27, 2023. On Friday, the U.S. government issues the July jobs report. The labor market has added jobs at a steady clip in the past year, despite efforts by the Federal Reserve to cool the economy. (AP Photo/Damian Dovarganes, File)

(AP Photo/Damian Dovarganes, File)

Listen to our conversation with Senior Economist for Zions Bank Robert Spendlove 👇

 

WASHINGTON (AP) — U.S. employers added 187,000 jobs last month, fewer than expected, as the higher interest rates continued to weigh on the economy. But the unemployment rate dipped to 3.5% in a sign that the job market remains resilient.

Hiring was up from 185,000 in June, a figure that the Labor Department revised down from an originally reported 209,000. Economists had expected to see 200,000 new jobs in July.

Still last month’s hiring was solid, considering that the Federal Reserve has raised its benchmark interest 11 times since March 2022. And the Fed’s inflation fighters will welcome news that more Americans entered the job market last month, easing pressure on employers to raise wages to attract and keep staff.

“This is a good strong report,” said Julia Pollak, chief economist at the jobs website ZipRecruiter. ”The worst fears that people had of a painful downturn, a loss of jobs, longer unemployment durations, all those things — those are not coming to pass.”

Unemployment fell to a notch above a half century low as 152,000 Americans entered the job force. The number of unemployed fell by 116,000.

Despite the influx of workers, average hourly wages rose 0.4% from June and 4.4% from a year earlier – numbers that were hotter than expected and are likely to worry the Fed.

The Labor Department revised payroll figures down for both May and June, reducing the number of jobs created in those months by 49,000. With the revisions, June and July were “the two weakest monthly gains in two-and-a-half years,’’ noted Paul Ashworth, chief North America economist at Capital Economics.

In July, health care companies added 63,000 jobs. But temporary help jobs – often seen as a sign of where the job market is headed – fell by 22,000. And factories cut 2,000 jobs.

Eugene Lupario, who owns the SVS Group staffing firm in Oakland, California, is seeing signs of a labor market slowdown – though certain businesses, such as restaurants and bars, are still hiring aggressively. “Interest rates have had an impact,’’ he said. Banks and home lenders have been hit hard by higher borrowing costs and aren’t looking for much help. “They’re not getting new loans. They’re not getting refis,” Lupario said. “Because rates are where they are, nobody’s gong out there and buying first or second homes right now.’’

And he said that some of the pandemic hiring frenzy has receded. “During COVID, a nurse, an RN, could ask for and get $100 an hour,’’ Lupario said. But hospitals are “not paying $100 an hour anymore. They’re paying pre-COVID rates at $75 to $85 an hour. Those same nurses that were making 100 bucks an hour are sitting on the sidelines maybe waiting for somebody to offer them $100 an hour, not realizing that they’re probably not going to get it.’’

The U.S. economy and job market have repeatedly defied predictions of an impending recession. Increasingly, economists are expressing confidence that inflation fighters at the Federal Reserve can pull off a rare “soft landing’’ – raising interest rates just enough to rein in rising prices without tipping the world’s largest economy into recession. Consumers are feeling sunnier too: The Conference Board, a business research group, said that its consumer confidence index last month hit the highest level in two years.

There’s other evidence the job market, while still healthy, is losing momentum. The Labor Department reported Tuesday that job openings fell below 9.6 million in June, lowest in more than two years. But, again, the numbers remain unusually robust: Monthly job openings never topped 8 million before 2021. The number of people quitting their jobs – a sign of confidence they can find something better elsewhere – also fell in June but remains above pre-pandemic levels.

The Fed wants to see hiring cool off. Strong demand for workers pushes up wages and can force companies to raise prices to make up for the higher costs.

The U.S. labor market “is now cooling in a gradual and orderly fashion in line with the policy goals at the Federal Reserve, which points to a growing probability of a soft landing for the economy,’’ said Joe Brusuelas, chief economist for the tax and accounting firm RSM. “Demand for labor remains solid but is clearly cooling compared to the torrid pace in 2021 and 2022.”

Many businesses continue to struggle to find workers.

In New Hampshire, the unemployment rate was 1.8% in June, tied with South Dakota for the nation’s lowest. “The labor market is very tight in this area,’’ said Jeff Winslow, general manager at DiPrizio Pine Sales, a sawmill in Middleton, New Hampshire, near the Maine border that employs 50 workers and could use a few more. “The competition is very difficult to keep up with.’’

Finding dependable help, Winslow said, is tough. So the mill pays a $1 an hour bonus to workers who complete their scheduled shifts. He looks for workers on job websites. But gesturing at his roadside help-wanted sign, he said: “My last four or five good hires have come from this sign. People drive by and they see the sign and they see things going on, and it’s a small community; so they know someone that works here or has worked here, and they stop by, and we tell them our story.’’

He said he had just talked to a recent high school graduate about joining the firm, promising to provide training. His pitch: “Once you become a skilled employee, we have to pay you to retain-you – or you’’ll go up the street to another mill.’’

Workers at the mill typically earn around $50,000 a year. “Without a good solid workforce,’’ he said, “you don’t have anything, so you have to pay a competitive wage.’’

In Goffstown, New Hampshire, Filtrexx Northeast Systems, which makes products that prevent soil erosion, just can’t find enough people locally. So it relies on foreign workers through the federal government’s H-2B visa program. “If it wasn’t for that type of program – with the job market how desperate as it is – I probably wouldn’t be here. I’d probably be out of business or retired or something,’’ said regional manager David Letourneau.

But even the visas can be a hassle. “We need them around April,’’ Letourneau said. “We don’t get them until June, July. One year we didn’t get them until October … I wish I had an answer on the labor market.’’

We want to hear from you.

Have a story idea or tip? Send it to the KSL NewsRadio team here.

Business + Economy

Utah's olympic delegation headed to Paris Monday, July 22 to present their pitch to host the 2034 W...

Aimee Cobabe

Utah Olympic delegation jets off to Paris

Utah’s Olympic delegation to Paris is on its way to make one final pitch to host the 2034 Winter Olympics.

13 hours ago

house for sale, no money down house purchase...

Curt Gresseth

No money down to buy a house? It can be done, says agent

If you are planning to buy a house in Utah, but can't afford to put money down, there is a way to make that work, says a real-estate agent

15 hours ago

Food truck employees work through scorching temperatures to keep their business going even during a...

Eric Cabrera

How food truck workers get through the intense heat

Food truck employees work through scorching temperatures to keep their business going even during a relentless heat wave.

5 days ago

The Christmas Box House's Christmas in July campaign is asking for donations, which have lagged beh...

Brian Carlson, KSLTV.com

Christmas Box House desperate for donations

At The Christmas Box House, Christmas in July is their campaign for donations, which have lagged behind this year.

6 days ago

FILE - Firearms are displayed at a gun shop in Salem, Ore., Feb. 19, 2021. Firearm stocks have rise...

Aimee Cobabe and Emma Keddington

Firearm stocks rise after attempted assassination of Trump

Along with a rise in firearm stocks, the Dow Jones saw record highs following the past week's big news events.

7 days ago

FILE: New apartments under construction in Herriman are pictured on Feb. 22, 2021. The Utah rental ...

Daniel Woodruff, KSL TV

Utah rental market softens, but for how long?

After years of high prices, the rental market in Utah is softening a little, thanks to a lot of new units currently hitting the market.

7 days ago

Sponsored Articles

A young woman smiles while reading the menu at a lakeside restaurant, enjoying the panoramic view o...

Bear Lake Convention & Visitors Bureau

The best restaurants to try in Bear Lake

Save this guide to the best restaurants in Bear Lake when you need to find a place to dine during your next visit.

Female leg stepping on weigh scales. Healthy lifestyle, food and sport concept....

Health Utah

Sustainable weight loss: the science-backed way to achieve it

Learn more about Debbie's weight loss journey with Health Utah, who have a unique weight loss philosophy for success.

Underwater shot of the fisherman holding the fish...

Bear Lake Convention and Visitors Bureau

Your Bear Lake fishing guide

Bear Lake offers year-round fishing opportunities. By preparing ahead of time, you might go home with a big catch!

A group of people cut a purple ribbon...

Comcast

Comcast announces major fiber network expansion in Utah

Comcast's commitment to delivering extensive coverage signifies a monumental leap toward a digitally empowered future for Utahns.

a doctor putting her hand on the chest of her patient...

Intermountain Health

Intermountain nurse-midwives launch new gynecology access clinic

An access clinic launched by Intermountain nurse-midwives provides women with comprehensive gynecology care.

Young couple hugging while a realtor in a suit hands them keys in a new home...

Utah Association of Realtors

Buying a home this spring? Avoid these 5 costly pitfalls

By avoiding these pitfalls when buying a home this spring, you can ensure your investment will be long-lasting and secure.

US employers add a still-solid 187,000 jobs in June; unemployment dips to 3.5%