The job gains topped analysts’ estimates of 190,000 to 200,000, although the Labor Department sharply revised downward its May job total, from 272,000 to 218,000, and decreased its April number to 108,000 from an originally reported 165,000, denoting a less robust economy in those months than policymakers had believed.

The unemployment rate edged upward from 4% in May to 4.1%. in June as more people joined in the search for jobs, marking the first month that the rate has been above 4% since November 2021.

“The labor market is still strong but not quite as strong as it was a year ago,” Gus Faucher, chief economist at PNC, told the Washington Post. “If we see a bit slower job growth, a little bit of cooling competition for workers, slightly less wage growth, that should help get inflation back to the Fed’s 2 percent target.”

Inflation was flat in May as a key gauge showed its lowest annual rate since 2021. The Commerce Department said last week that the Personal Consumption Expenditures Price Index was unchanged from the previous month. It had risen 0.3% in April.

In the 12-month period through May, the PCE index rose 2.6% after climbing 2.7% in April.

The core PCE index, which strips out volatile food and energy prices, was up 0.1% in May, the smallest gain since November. It had been up by an upwardly revised 0.3% in April.

In a sign that pay increases are moderating, the government said today that workers’ average hourly earnings rose by 10 cents, or 0.3%, in June, to $35, down from 0.4% the previous month.

During the past 12 months earnings have increased by 3.9%, down from 4.1% in May, but even with the decline they remain above the rate of inflation.

The fresh data — especially the rise in the jobless rate and the pay moderation — could give the Fed more reasons to approve an interest-rate cut in the next few months. The central bank’s policymaking Federal Open Market Committee next meets on July 30 and 31, although most economists don’t expect a rate cut, anticipating that a move would more likely come at the following meeting on Sept. 17 and 18.

“The job market is bending without yet breaking, which boosts the argument for rate cuts,” David Russell, global head of market strategy at TradeStation, told CNBC. “Things are not too hot and not too cold. Goldilocks is here and September is in play.”

The government said today that the labor force participation rate — the measure of the population that is in the workforce — ticked up slightly, to 62.6% from 62.5% the previous month.

The government sector topped all job categories in June with a gain of 70,000; health care, which has been a jobs leader for the past year, added 49,000; social assistance employment added 34,000 jobs; and construction added 27,000 jobs.

Notably, though, the professional and business services category lost 17,000 jobs in June and the retail sector lost 9,000.

Ahead of last Friday’s jobs report, the Labor Department said Tuesday that job openings nationally increased in May, which suggests that labor demand remains on a healthy path. The number of available positions climbed to 8.14 million from a downwardly revised 7.92 million the previous month, the department’s Bureau of Labor Statistics said in its Job Openings and Labor Turnover Survey.

Manufacturing, government and health care were the industry leaders for job openings. Hirings — and layoffs — increased across the economy, and the number of openings per unemployed worker was 1.2, the same as the previous month. That figure is the lowest since June of 2021.

The ADP Research Institute said Wednesday in its National Employment Report for June that private sector employment rose by 150,000 during the month, which was down from an upwardly revised 157,000 the previous month, and annual pay was up 4.9% year-over-year.

“Job growth has been solid, but not broad-based,” Nela Richardson, chief economist at ADP, said in a statement accompanying the report. “Had it not been for a rebound in hiring in leisure and hospitality, June would have been a downbeat month.”

The Commerce Department said last week that consumer spending rose just 0.2% in May, although it was up 0.3% when adjusted for inflation. Personal income rose 0.5%; it had been up 0.3% the previous month.

Ian Wyatt, director of economics at recreational marine lender Huntington Commercial Bank, told Trade Only Today that consumers’ income gains bode well for the economy. Consumer spending accounts for as much as 70% of it.

“Yes, strong real wage growth and an increase in the savings rate are very good signs for the outlook for consumer spending,” he said. “Hopefully this is the beginning of a trend.”