Job growth strong in June despite slowdown fears

STORY: The U.S. Labor Department's closely watched employment report on Friday showed employers hired far more workers than expected in June, adding 372,000 jobs last month, in the face of high inflation and a slowing economy.

Friday's report was likely to ease growing fears of an imminent recession.

But Mizuho Securities' chief U.S. economist Steven Ricchiuto said the U.S. economy wasn't out of the woods yet, and that the strong jobs number should dispel any ideas the Federal Reserve might ease up on raising interest rates.

"When you look at the numbers in general this morning, they're signaling to you that, basically, it's going to take time for the macroeconomic slowdown to manifest itself in a sharp change in the labor market environment. And this is one of the key reasons why we believe, you know, the market in the last week or so has gotten a little bit too optimistic about the notion that the Federal Reserve would be executing less rate hikes rather than more rate hikes in the near future."

That means the Fed is likely to deliver another 75-basis-point interest rate hike at the end of July.

The Labor Department also said the unemployment rate held at 3.6% for the fourth straight month, just above a 50-year low.

The jobs report also showed employers continued to raise wages at a steady clip and gave no indication that companies were reducing hours for workers.