The U.S. created 209,000 new jobs in June to mark the smallest expansion in more than two and a half years, possibly a sign that the labor market is cooling off as interest rates continue to rise.
Hiring in May and April was not as strong as previously reported, either.
A survey by the Wall Street Journal reported that economists forecast a 240,000 increase in new jobs.
The unemployment rate dipped to 3.6% from 3.7% on Friday, the government said.
The jobless employment report could mollify senior Federal Reserve officials who want hiring and economic growth to slow to help them bring down high inflation.
However, it may not be enough to forestall a further rise in interest rates, particularly with wages rising quickly and resulting in inflationary pressures.
hourly pay rose a sharp 0.4% in June - higher than expected - and left the increase over the past year at 4.4%. The pandemic was causing wages to rise less than 3% a year.
Later this month, the Fed is widely expected to raise rates as it seeks to restore inflation to pre-pandemic levels of 2% or less. Inflation has been stuck in a 4% to 5% range.
Increased borrowing costs reduce inflation by slowing the economy, but they also raise the risk of recession.
The economy has been growing at a brisk pace, even though the economy has not been able to keep up with expectations.
When the economy slows even more, the Fed is determined to keep increasing rates, and the Central Bank is convinced that high inflation is going away. It will take a few more jobs reports showing a further slowdown in hiring to persuade the Fed.
The Dow Jones Industrial Average DJIA and the S&P 500 SPX were set to open flat. The yield on the 10-year Treasury BX: TMUBMUSD 10 Y was up to 4.4% after the jobs report.