US jobs dip: Why is it getting harder to hire?

**Vishala Sripatma** (0:01)
More jobs in the US but fewer waiters.

**Kevin Hassett** (0:04)
People are frustrated and left the labor market. They should come back in because there are jobs everywhere.

**Dwayne Greenleaf** (0:09)
Our restaurant has been down about 10 to 13 percent in general dining sales.

**Vishala Sripatma** (0:15)
It's World Business Report from the BBC World Service. I'm Vishala Sripatma. On the way, encouraging news about employment in the US but does it mean rates won't go up and OpenAI reportedly are offering up a stake of its business to Trump's White House. Plus, it's the wedding of the year and at an estimated 20 billion dollar bill, Taylor Swift and Travis Kelce mean business.
So, the latest US jobs numbers have landed, and some say they're a little underwhelming. The economy added just 57,000 jobs in June, which missed expectations. But the unemployment rate did edge down to 4.2%, offering a small but significant silver lining. So despite the figures, the director of the White House's National Economic Council, Kevin Hassett, says there are plenty of job opportunities around the country.

**Kevin Hassett** (1:19)
The thing is that if you look at the Jolts data, where they tell you job openings, there are millions and millions of job openings. And so if people are frustrated, they got frustrated maybe because of Joe Biden's economy and left the labour market, they should come back in because there are jobs everywhere.

**Vishala Sripatma** (1:34)
So why does this all matter? Well, it gives us a sense check on how the world's largest economy is doing. And it can give us some clues about what the central bank there, the Federal Reserve, might do.
So here's BBC's North America business correspondent, Michelle Fleury, who's going to tell us a bit more about those numbers.

**Michelle Fleury** (1:52)
The numbers, we saw 57,000 new jobs created in the month of June. That was substantially less than economists were forecasting. And it's a slower pace than we've seen in previous months. How worried should we be about that? You know, I've been speaking to a couple of economists and they say, well, it's not terrible. It's not great, but it's not terrible either. And here's why.
The unemployment rate is at 4.2 percent. That is, you know, a nice level, I'm told, to be at pretty low.
The other aspect of all of this is when you take into account demographics, an aging population, you know, immigration is down. What is the kind of neutral rate at which America should be adding jobs? And so some economists say, well, you know, it's not necessarily showing an economy that's expanding, but it also doesn't necessarily reflect an economy that's shrinking. So it's slower hiring, but nonetheless pretty steady. I think that is the takeaway here.

**Vishala Sripatma** (2:58)
Is it too early to talk about what it might mean for the Federal Reserve and interest rates?

**Michelle Fleury** (3:03)
Look, if you take how the Dow has reacted to the news, then I think investors are betting it means there is less pressure on the Federal Reserve to raise interest rates.
And let me explain that. We've seen this pressure, inflationary pressure, particularly spiking up even higher after the conflict with Iran. The concern was, would we also see slower growth in terms of weakness in the jobs market? I think this removes the concern about slower growth, so that need to lower rates. But at the same time, there is signs of wage increases, not dramatic, but slightly. And so it means the Federal Reserve still needs to kind of focus on controlling inflation, which means a rate hike is on the table. But it's not so pressing that it needs to act immediately. And I think that's why you're seeing a bit of relief on Wall Street.

**Vishala Sripatma** (3:58)
And in terms of where we saw the biggest surprises in the data, which sectors do you think reflect that then?

**Michelle Fleury** (4:06)
Yeah, the private sector continued to add jobs, manufacturing saw some small gains, health care was another big one. I think the big surprise was hospitality and leisure. You know, bear in mind, we're in the middle of the World Cup competition.
People thought that would create more, you know, even if it's temporary, create more jobs. It doesn't appear that has been the case.

**Vishala Sripatma** (4:24)
So that was Michelle Fleury, our North America business correspondent, breaking down the numbers there. So how are businesses in hospitality finding hiring? Well, Dwayne Greenleaf is the owner of the Benchmark Restaurant and collects catering in California. Hi, Dwayne.

**Dwayne Greenleaf** (4:43)
Good afternoon.

**Vishala Sripatma** (4:44)
Thank you very much for joining us. You heard there from our correspondent about how catering slightly bucked the trend of what was expected. People thought that the World Cup would boost hospitality, for example, in the US and it hasn't quite had that effect. Are you finding that to be the case?