Published: Sun, July 08, 2018
Finance | By Claude Patterson

US adds solid 213,000 jobs; unemployment up to 4%


According to the latest jobs report, U.S. employment rose 213,000 in June while there was a 37,000 upward revisions to the jobs numbers for April and May.

The figures for April and May were also revised up, showing that 37,000 more jobs were created in these months than previously estimated.

Michael Gapen, chief United States economist at Barclays Plc in NY and a former Fed official, said that the boost in workers coming into the labour market bodes well for pushing down the unemployment rate again.

The unemployment rate ticked up to 4% from 3.8%, as the strong labour market encouraged more people to look for work.

The monthly Labor Department report painted a less sanguine picture for workers' paychecks.

Wage growth remained sluggish, however, and was effectively erased by inflation: average hourly earnings rose just 0.2 percent to $26.98, putting wages up 2.7 percent over the same month past year, the same as the 2.7 percent rise in the Consumer Price Index. The unemployment rate edged up to 4 percent, but this was due to a reported surge of 601,000 people entering the labor force.

Hassett pointed to the increase in labor force participation for African American women and Hispanic men and women as an encouraging sign that people are being drawn back to work.

Average hourly wage growth, which is closely watched by the Bank of Canada ahead of its rate decisions, remained firm last month at 3.6 per cent.

In fact, if we compare the average wage for the last three months (April, May, and June) with the prior three months (January, February, and March), it appears to be slowing slightly, with an annualized growth rate of just under 2.6 percent.

The combination of strong job growth with stagnant wages has been an ongoing pattern in jobs reports since the 2007-2008 financial crisis and subsequent "Great Recession".

"Labor market fundamentals remain solid, with a meaningful pickup in service-sector employment surveys", Hill said.

"Contacts expressed concern about the possible adverse effects of tariffs and other proposed trade restrictions", the Fed said in minutes published Thursday.

The job tally, nonetheless, shows the sustained prowess of the economy, which has now maintained 9 years of expansion, the second longest period on record. USA stock index futures were little changed.

"I think that we're seeing the front loading of the fiscal-stimulus impact, which we expected to boost growth this year", Julia Coronado, president of MacroPolicy Perspectives LLC in NY, said on Bloomberg Television. Trump oversaw a steadily-declining unemployment rate which eventually reached its lowest level since 2000.

While economists say the tax cuts are boosting growth this year, they warn that Trump's actions on trade could have damaging impacts on the economy and jobs.

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