June Sees Employment Rates Increase 213000

by Frankie Norman July 10, 2018, 0:13
June Sees Employment Rates Increase 213000

Data for April and May was revised to show 37,000 more jobs created than previously reported.

The United States has increased jobs monthly for more than seven years, but some analysts suggest that the escalating trade disputes between the U.S. and its allies could threaten growth.

Still, the healthy job gains will likely push down unemployment the rest of the year, economists say. "Business' number one problem is finding qualified workers", says Moody's Chief Economist Mark Zandi.

For the Fed, the report presents a bit of a dilemma.

The Labor Department will publish its closely watched employment report on Friday at 0830 EDT (1230 GMT).

In the past three months, the United States has increased 211,000 jobs monthly on average. That kept the annual increase in average hourly earnings at 2.7%.

The lack of wage growth is disappointing, but still higher than the rate of inflation, said Douglas Holtz-Eakin, president of the American Action Forum.

Several measures showed that the labour market still has slack to absorb.

In addition, the data should encourage the Federal Reserve to hike interest rates at least once more this year (with the balance of risks tilting toward two hikes).

The dollar fell to a three-week low against a basket of currencies on the employment report. Trump has spoken about slapping tariffs on imported cars, trucks and auto parts, which General Motors has warned could hurt the US auto industry and drive up vehicle prices.

It also boosted the USA stock indexes, which are expected to reap weekly gains on Friday after 14 days of losses. Nonetheless, at 6.6 million, the number of unemployed Americans could again be smaller than current job openings.

At the same time, unemployment inched up to 4 percent (an increase of 499,000) in June, registering a rise over the previous 18-year low of 3.8 percent. More than 600,000 workers joined the economy last month, bringing the total labor force participation rate to 62.9 percent.

Gross domestic product growth estimates for the April-June period are as high as a 5 percent annualized rate, more than double the 2.0 percent pace logged in the first quarter.

What about tariffs? On Friday, the US formally imposed an additional $34 million in tariffs on China. The figure for aircraft imports more than tripled to $937 million due to the purchase of several air liners from the U.S. Job growth occurred in professional and business services, manufacturing, and health care, while retail trade lost jobs. Construction jobs have increased by 282,000 over the year to meet housing demand, and mining has tacked on 95,000 jobs as energy prices jump.

Job gains in June could, however, come below expectations amid growing anecdotal evidence of worker shortages across all sectors of the economy. Manufacturing led the way with an increase of 36,000 jobs, 12,000 of which were in autos.


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