US Adds Over 200K Jobs in June as Unemployment Rate Hits 4.1%, Highest Since 2021

By Thea Felicity

Jul 05, 2024 10:37 AM EDT

May Jobs Reports Show Economy Added More Jobs Than Expected, 272,000 Added During The Month — A "Now Hiring" sign is seen at a FedEx location on E 42nd Street on June 07, 2024 in New York City. A jobs report for the month of May released by Labor Department showed that the U.S. added employers added 272,000 nonagricultural jobs and also reported that the unemployment rate rose to 4 percent for the first time in more than two years.
(Photo : Michael M. Santiago/Getty Images)

Before June 1 started, VCPost reported that the jobless rate rose in the US, with unemployment benefit applications going from 8,000 to 229,000.

In June, the unemployment rate strengthened to 4.1%, its highest level since November 2021. According to Yahoo Finance, the US labor market responded by adding 206,000 jobs in the same month, surpassing economists' expectations of 190,000. While the rise in the employment rate is concerning, the positive job growth points to a potential slowdown or challenges within the job market, partly due to recent slowing inflation and fewer layoffs.

The Bureau of Labor Statistics noted that June's job gains (206,000) were lower than the revised figure for May (218,000), which was also adjusted down from the originally reported 272,000.

However, the rise in the unemployment rate from 4% in May to 4.1% in June indicates that there may be problems or weaknesses in the labor market, even though the overall number of jobs continues to grow.

Meanwhile, June saw government employment have the most significant job gains, adding 70,000 positions, while healthcare employment grew by 49,000 jobs, below the average monthly gain of 64,000 over the past year.

Interest Rate Cut for Unemployment Rate

The report also coincided with record highs in the stock market, driven by softer-than-expected economic data, including inflation readings.

Wage growth, a critical measure of inflation pressures, slowed to 3.9% year-over-year, with a monthly increase of 0.3%, down from 0.4% in the previous month.

Federal Reserve Chair Jerome Powell stated that the US is moving toward a "disinflationary path," leading investors to anticipate two interest rate cuts this year, with a 75% chance of the first cut occurring in September.

Should the Federal Reserve cut interest rates, businesses' and consumers' borrowing costs will decrease. This will encourage companies to invest and expand, increasing hiring and potentially reducing unemployment.

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