The U.S. economy added 209,000 jobs in June, pushing off recession fears that dominated the early half of 2023.

The unemployment rate remained fell slightly to 3.6%, according to a Bureau of Labor Statistics report released Friday.

After months of cooling down, the U.S. labor market continues to show signs of strength, similar to the era before the pandemic.

Employers are spinning out jobs at a rate that has consistently beaten economists’ predictions. Workers continue to quit their jobs at an elevated pace, according to a separate Bureau of Labor Statistics report out Thursday. New claims for unemployment benefits are trending down slightly over a four-week average, according to a Labor Department report. A wave of layoffs in the overheated tech industry has begun to subside.

“Businesses that were very worried about the possibility of a downturn and sitting on the sidelines are feeling more confident now that the U.S. could actually avoid a (recession),” said Julia Pollak, chief economist at ZipRecruiter. “The labor market actually is remarkably resilient.”

The hardy job market, despite some cooling, has helped prop up the broader economy, even as the Federal Reserve has taken aggressive action to slow things down. Despite higher borrowing costs, which have weakened major sectors including housing and manufacturing, employers are still adding jobs at a brisk pace. Layoffs remain low, and workers are getting raises.

As long as Americans remain employed, they’ve been able to keep spending, even in the face of persistent inflation.

Bloomberg Economics, which last fall forecast a 100% chance of a recession by October, now says the country will “narrowly dodge” a downturn this year. Major banks including Goldman Sachs and Barclay’s are watering down recession predictions, in large part because of the job market’s resilience.

“As long as the economy continues to produce more than 200,000 jobs a month, this economy is not going to slip into recession,” Joe Brusuelas, chief economist at RSM, wrote in a research note.

Investors are also optimistic, with financial markets mostly up for the year after a dour 2022. The S&P 500 is up more than 14% for the year and the tech-heavy Nasdaq is up an eye-popping 30% for the year.

The labor market has shown continued signs of strength across a variety of sectors, with exceptional growth in health care, government, professional and business services, and leisure and hospitality. Coming out of pandemic lockdowns, consumers have shifted spending away from goods toward experiences and outings such as travel and eating at restaurants.

Meanwhile, a rapidly aging population created a backlog of demand for healthcare services, exacerbating the need for workers in that sector. The industry is expected to expand more than any other sector over the next decade.

Mark Helm, a pediatrician in Silverton, Ore., is preparing to open a second office. But so far, he says, the toughest part has been securing enough doctors, medical assistants, and receptionists, who are all in high demand.

“We’re in expansion mode here – we see an opportunity to grow,” he said. “But finding the right employees and getting them trained, that’s gotten much harder, even harder than before.”

Helm opened Small Town Pediatrics in late 2021 and has three employees, all of whom were hired within the past three months. Even though demand for workers throughout the economy has cooled – job openings nationwide decreased in May – he says it’s gotten tougher to attract applicants, because people aren’t as keen on switching jobs as they were at the height of the Great Recession.

“People have a mentality of staying where they are, and employers who have good employees want to do all they can to keep them,” he said. “We put out advertisements but don’t get an awful lot of interest.”

But other industries have continued their gradual slowdown. Manufacturing and information, which includes tech, lost jobs in May. More than 212,000 tech workers have lost their jobs this year, according to the tech layoff tracker Layoffs.fyi. Still, economists say there are signs, especially with speculation around A.I., that the tech industry is stabilizing.

“I think tech is actually starting to turn a corner,” said Aaron Terrazas, chief economist at Glassdoor. “There were very aggressive layoffs early on this year, but I think for the most part tech companies have cut where they’re going to cut. And they’re starting to see the writing on the wall that they are starting to lose employees to smaller companies, to other industries.”

In another sign of weakness, the overall unemployment rate rose from 3.4 to 3.7% in May. Black workers, who have seen historic employment gains since the height of the pandemic, made up nearly half of May’s spike in unemployed workers. Unemployment also shot up for workers with disabilities and those without high school and college diplomas, all groups that tend to be the first to lose their jobs in downturns.

But many workers have continued to use their leverage to switch jobs and find better opportunities.

After 20 years working in auto dealerships, Darren White quit his job and got hired this spring as a ramp assistant, at San Francisco International Airport, directing incoming flights to their gates and loading and unloading luggage for passengers.

White, 54, says he makes roughly the same income as he did at the auto dealership, about $20 an hour. But he pays much less out of pocket for union retirement and health- care benefits that he says will provide him security for many years to come. Plus, he can fulfill his dreams of traveling to New York City and Hawaii through the airlines’ free flight perk.

“I said to myself, ‘This is a time in my life that I want to have great benefits, do something different, and plan for retirement,'” White said. “This job is perfect for me.”

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U.S. slowed hiring but still added solid 209,000 jobs in June in sign of economy’s resilience