American employers slowed downsizing in June, announcing the lowest number of layoffs since October 2022.

According to the latest job cuts report from employment firm Challenger, Gray & Christmas released on Thursday, U.S.-based employers said they were cutting 40,709 jobs in June, down 49% from the number of cuts announced in May.

The planned pace of layoffs in June was well above the 32,517 cuts announced in June 2022. There are 458,209 cuts so far this year, a 244% increase from the 133,211 layoffs announced through June 2022, as employers brace for the prospect of recession.

The labor market has remained strong despite the 500 basis points worth of interest rate hikes from the Federal Reserve since March 2022 as the U.S. central bank tries to cool inflation. Last month the Fed decided not to raise rates but indicated that there could be another two quarter-percentage-point increases before the end of the year.

“The drop in cuts is not unusual for the summer months. In fact, June is historically the slowest month on average for announcements. It is also possible that the deep job losses predicted due to inflation and interest rates will not come to pass, particularly as the Fed holds rates,” Andrew Challenger, senior vice president of Challenger, Gray & Christmas, said in a statement.

Last month's announced job cuts total was the highest for a month of June since 2020.

The technology sector continues to downsize the fastest with 141,516 total job cuts announced this year, up 2,353% from 5,769 over the same period in 2022. On a month-to-month basis, however, these cuts slowed by nearly 80%, falling to 4,685 in June from 22,887 in May.

On Friday, the Department of Labor is set to release monthly unemployment figures and payroll changes. Economists polled by Reuters forecast 225,000 jobs added in June, fewer than the 339,000 added in May, and a drop in the unemployment rate to 3.6% from 3.7%.

Read the full report here.