The U.S. labor market showed signs of a continued cooling last month, but extended a two-and-a-half-year streak of job growth, the Labor Department said on Friday.

US employers added a seasonally adjusted 209,000 jobs, and the unemployment rate fell to 3.6 percent from 3.7 percent in May as unemployment remained near lows not seen in more than half a century.

June was the 30th consecutive month of job growth, but the gain fell from a revised 306,000 in May and was the lowest since the streak began.

Wages, as measured by average hourly earnings for workers, rose 0.4 percent from the previous month and 4.4 percent from June 2022. Those increases were in line with May’s trend but exceeded expectations, a potential point of concern for Federal Reserve officials who have been trying to rein in . in wages and prices by raising interest rates.

However, the response to the report from economists, investors and labor market analysts was generally positive. The resilience of the labor market has bolstered hopes that inflation can be brought under control as the economy continues to grow.

“Twelve to 18 months ago, if you were to say what needs to happen to get a soft landing, it would look a lot like what’s happened so far,” said Jason Draho, head of asset allocation for the Americas at UBS. “Not many people thought it was possible, including some very prominent economists. It may not happen yet, but we’re on a path consistent with one.”

President Biden celebrated the report without qualification, emphasizing that unemployment remained below 4 percent for the longest stretch of months since the 1960s. “This is Bidenomics in action,” he said in a statement released by the White House.

For a year or more, concerns about an impending recession dominated discussions about the economy. Most economists expected a recession to hit the US by now – in part because of the rapid escalation of interest rates. That increase in the cost of credit caused shocks in the banking sector and, for a while, covered the housing market.

But the debilitating effect of higher rates has come against the robust income and spending of many households and the resilience of businesses — both bolstered by emergency pandemic support from Congress and the Fed. Although families, business managers and investors alike had to contend with the frustrating realities of inflation and economic uncertainty, growth continued, almost in defiance.

Ellen Zentner, the chief economist at Morgan Stanley, whose firm was unusual in not predicting a recession last year, said: recent increase in investor sentiment could be connected to “an awareness that the economy is much more resistant to a sharp tightening of the stance of monetary policy than previously expected.”

Inflation data released next week is expected to show that inflation fell to 3.2 percent annually, from a peak of 9.1 percent last year, according to the Federal Reserve Bank of Cleveland. Some economists think it may be possible to fully combat inflation without causing a big jump in unemployment. But views remain divided.

“The environment of ‘pick the data point that supports your story’ continues,” said Oren Klachkin, chief U.S. economist at Oxford Economics. “I still think a recession is more likely than not.”

Some analysts were concerned to see the unemployment rate for Black workers rise in June to 6 percent, after reaching a low of 4.7 percent two months earlier.

After a huge boom during 2020 and 2021, industries related to the creation and transportation and sale of goods seem to be experiencing a retreat. Employment in retail trade, transportation and warehousing all fell in June. But government jobs, which lagged behind, had strong gains, along with a booming service sector.

The prime-age labor force participation rate, the proportion of people aged 25 to 54 working or looking for work, jumped to its highest level since 2002. Estimates of economic growth for the first half of the year were revised upwards.

Major banks such as JPMorgan Chase and Goldman Sachs predict that a recession this year is now unlikely. The depressed housing market is showing signs of life. Recent data shows that manufacturing construction is booming. Consumer spending has fallen from its heights in 2021, but many retail analysts say it may simply be in line with pre-pandemic trends.

The key question, said Claudia Sahm, a former Fed economist, is whether a slowdown proves to be “a sign of ‘they’re just getting back into balance,’ and then we just keep going.”

A growing cohort of investors believe continued growth could plant the seeds of its own destruction as the Fed reacts by keeping borrowing costs higher for much longer than businesses anticipated. That could make some debt burdens unsustainable for businesses, especially those that rely on loans or lines of credit from banks or that may need to seek new financing from investors.

Corporate debt defaults rose last month, to a level more than double the same period last year, according to Moody’s Investors Service. Some economists see that trend – usually worrisome – as a sign of normalization since bankruptcies were comparatively, unusually rare, after the government’s bailout rush.

“A rise in defaults after a rate hike just isn’t that surprising,” said Justin Wolfers, a professor of economics and public policy at the University of Michigan.

Walt Rowen, the third-generation owner of Susquehanna Glass, a 113-year-old glassmaking business in Columbia, Pennsylvania, is a microcosm of the volatility the US economy has experienced since the start of the pandemic.

In 2019, his business was booming, with about $5 million in revenue, Mr. Rowen said. When the pandemic hit, and Susquehanna Glass didn’t qualify as an essential business, “we had to lay everyone off,” Mr. Rowen said. “We could never have people working remotely.”

He was able to get through the past three years only because of two forgiven loans under the Paycheck Protection Program and a third, longer-term loan from the Small Business Administration. Now, as the pandemic fades and supply chains recover, business has stabilized — but faces new challenges.

“I was paying entry-level factory workers about $10 an hour in 2019, and now I can’t get anyone to come in for an interview unless I offer at least $13 — so my labor dollars are up 30 percent, and that’s not going to come back down,” said Mr. Rowen. “But the prices of glass started to come down.”

Securing stable financing for the business is a looming problem, he said, “because the interest rates that the Fed has set have raised borrowings from basic lines of credit for companies like mine by 5.6 percent over what they were before.”

His interest payments to his bank have doubled, making him more dependent than ever on strong holiday season sales this year to pay off enough debt. Despite everything, Mr. Rowen’s outlook is only partly cloudy.

“We’ve seen all the highs and lows: My grandparents saw World War I, World War II and the Great Depression, and so I got Covid,” he said. “We are making adjustments. I think the worst is over. I think where we can survive at this point.”

But he acknowledged that others may not be so lucky.

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