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United States jobs growth stronger than expected

United States jobs growth stronger than expected

June's Employment Situation report from the Bureau of Labor Statistics (BLS) records a pickup in total jobs of +213,000 in the latest month.

May's figure is now being estimated higher by +37,000 vis à vis what was reported for May a month ago.

The unemployment rate rose from an 18-year low of 3.8% to 4% but that was because more people were drawn into the strong labor market.

The employment increase last month beat economist expectations for a 20,000 gain and was the second highest so far in a year where job creation has been sluggish.

Analysts in a Reuters poll predicted a gain of 24,000 positions and said the jobless rate would remain unchanged. This extra labour supply has seemingly helped keep wage growth in check. It's the 93rd consecutive month of job gains, an impressively long and strong stretch of growth.

The U.S. Labor Department says for the first time in recorded history there is a greater number of job openings than people who are unemployed. The manufacturing sector buzzed with activity last month, and spending on construction rose.

The slow growth in labor costs may dissuade the Federal Reserve from raising interest rates more aggressively to head off a spike in inflation. It increases pressure to raise wages, and even curbs business growth if there are not enough people to do the work. Some recent reports have suggested that businesses can't find qualified workers at the wages they're offering - but this report "did not have any evidence to back up those claims", said Elise Gould, a senior economist with the Economic Policy Institute.

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All told, employers added 213,000 jobs in June. And Goldman Sachs says the tight labor market tends to boost hiring in June as companies aggressively target students and graduates.

While the national unemployment rate fell to a 17-year-low at just 3.8% in May, those who are still trying to re-enter the workforce will have the toughest time in Missouri, Alaska and North Carolina, according to a new GOBankingRates.com report listing the best and worst states for unemployed job seekers.

Nonetheless, an escalating trade war poses a clear threat.

Major trade partners, including China, Canada, Mexico and the European Union, have retaliated with their own tariffs. Continue to look for even faster wage growth. They had expected that the unemployment rate held steady at 3.8%, its lowest level since 2000.

The economy also faces a substantial threat from the trade tension with China and from other trade disputes with US allies, including Canada and Europe.

The unemployment rate increased because more people were looking for jobs; the labor-force participation rate rose to 62.9% from 62.7%.


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