Employment growth slows with 209,000 jobs in June

The economy added 209,000 jobs in June, the Bureau of Labor Statistics reported Friday, reflecting a slowdown in the labor market as the Federal Reserve tightens its monetary policy.

The unemployment rate fell slightly to 3.6%, still a very low figure historically.

Friday’s report is being closely scrutinized as it comes against the backdrop of several major economic stories — such as the Fed’s tightening, uncertainty in the housing market, fears of a recession, and lingering concerns about the banking system following the collapse of Silicon Valley Bank.

A weaker jobs report indicates that the Fed’s rate hikes are beginning to work and could add some credence to those who think the Fed’s interest rate target has gone as high as it should go.

The Fed paused its rate hikes following its June meeting — the first time it voted not to raise rates since it first started tightening back in March of last year. But Fed projections and remarks from Fed officials have made it clear that at least one more hike is likely, although it is yet to be seen how the central bank will react to the latest employment report.