(NEW YORK) — Hiring surged in June as businesses navigated uncertainty surrounding President Donald Trump’s tariffs, federal government data on Thursday showed. The reading exceeded economists’ expectations.

The U.S. added 147,000 jobs in June, according to data from the U.S. Bureau of Labor Statistics. That figure showed a slight increase from 139,000 jobs added in the previous month. The unemployment rate ticked down to 4.1%, putting it at near-historic lows.

Key measures of the economy have proven resilient in recent months, defying fears of resurgent inflation and a possible economic downturn. Hiring has kept up a solid pace, humming along with less disruption than some economists anticipated.

Federal government employment declined by 7,000 jobs in June, bringing total losses in the federal government to 69,000 since January, when Trump established the Department of Government Efficiency, or DOGE. The Elon Musk-led organization has sought to slash federal spending, in part by eliminating some federal jobs.

Employment showed little change in the manufacturing sector, which Trump has sought to boost with levies on foreign goods.

The fresh data arrived less than a week before a deadline established by the Trump administration for the completion of dozens of trade deals with countries facing the threat of so-called “reciprocal tariffs.”

So far, the White House says it has reached trade agreements with the United Kingdom and Vietnam, as well as a preliminary accord with China.

In recent weeks, Trump has dialed back some of his steepest tariffs. Another batch of tariffs remains in legal limbo following a pair of federal court rulings in May, though the levies remain in place for now.

Prices accelerated slightly in May, the most recent month for which such data is available, but inflation remains near its lowest level since 2021.

Warning signs point to the possibility of elevated prices over the coming months, however. Nationwide retailers like Walmart and Best Buy have voiced alarm about the possibility that they may raise prices as a result of the levies.

The Fed held its benchmark interest rate steady last month, continuing a wait-and-see approach adopted by the central bank in recent months as it observes potential effects of Trump’s tariff policy. Four meetings and six months have elapsed since the Fed last adjusted interest rates.

The Fed is guided by a dual mandate to keep inflation under control and maximize employment. In theory, a lowering of interest rates could help stimulate economic activity and boost employment, especially while inflation remains low.

Powell, in recent months, has warned about the possibility that tariffs may cause what economists call “stagflation,” which is when inflation rises and the economy slows.

Stagflation could put the central bank in a difficult position. If the Fed raises interest rates as a means of protecting against tariff-induced inflation under such a scenario, it risks stifling borrowing and slowing the economy further.

On the other hand, if the Fed lowers rates to stimulate the economy in the face of a potential slowdown, it threatens to boost spending and worsen inflation.

On Tuesday, Powell appeared to signal an openness to cutting interest rates as early as this month.

When asked about a possible interest rate cut at the Fed’s upcoming meeting, Powell said, “I wouldn’t take any meeting off the table or put any on the table. It depends on how the data evolves.”

Powell affirmed that a majority of members of the Fed’s policy-making board support additional interest cuts this year. The central bank will hold four rate-setting meetings over the remainder of 2025, and the first will happen on July 29 and 30.

“A majority of us do feel it will be appropriate in the remaining four settings of the year to begin reducing rates again,” Powell told the audience at the European Central Bank forum in Sintra, Portugal.

Copyright © 2025, ABC Audio. All rights reserved.