As officials at the Federal Reserve weigh whether and when to cut interest rates this year, they have been hoping to see evidence that the labor market is gradually cooling but with unemployment remaining low. Hiring and wage growth both accelerated in May, according to the report. That could add to fears that the labor market remains too hot to bring inflation fully under control.
Unemployment rose slightly, hitting 4 percent for the first time in more than two years. That suggests high interest rates could be starting to take a toll in the form of increased job losses. Investors think there is about a 50 percent chance that the Fed will cut rates at its September meeting, but those odds have steadily worsened in recent months as inflation has proved more stubborn than policymakers had hoped.
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