US adds a solid 213000 jobs; unemployment up to 4 pct

Lloyd Doyle
July 8, 2018

Restaurants added 16,400 jobs in June, under the average of 18,400 over the year.

US employers kept up a brisk hiring pace in June by adding 213,000 jobs, a sign of confidence in the economy despite the start of a potentially punishing trade war with China. The unemployment rate edged up to 4 percent, but this was due to a reported surge of 601,000 people entering the labor force.

There are over 94 million people over the age of 16 in the country who don't work and are now not looking for work, mostly because they study, are ill, retired, or homemakers.

Strong jobs growth continues at a time when the economy is growing 4%, and inflation is about to break 3%. On the same day as the release of June's jobs report, the USA and China are imposing duties on more than $30 billion-worth of each other's goods.

"The tariffs jumble things about what we should expect to see in the next few months", said Cathy Barrera, chief economist at ZipRecruiter, to the AP. The concern is that a tit-for-tat escalation of tariffs will be increasingly damaging for activity, hurting sentiment and leading to a slower pace of growth in capital expenditure and job creation. It's the 93rd consecutive month of job gains, an impressively long and strong stretch of growth.

That could boost the annual increase in average hourly earnings to as high as 2.9 percent, the largest gain since June 2009, from 2.7 percent in May.

In Europe, the assault on working class wages and conditions has primarily taken the form of brutal austerity policies to slash social programs and increase the tax burden of workers to pay for the subsidies offered to European banks. Even so, a steady pace of hiring and gradually rising wages, along with lower taxes, are helping underpin consumer spending and propelling a rebound in USA growth.

A closer look at the numbers shows Canada added 9,100 full-time jobs in June and 22,700 part-time positions.

The overall picture is again one of a strengthening labor market, but one that is still not tight enough to produce substantial wage growth. Construction payrolls likely increased after rising by 25,000 in May.

"In the past six months, people were just leaving right and left", she said. "This is exactly what we wanted to see: marginalized Americans coming back into the labor force".

Health care added 25,200 jobs, nearly exactly in line with its average over the a year ago. The education and health sector added 54,000.

Nonetheless, the USA jobs market is incredibly hot right now with yesterday's NFIB jobs survey suggesting that in the small business sector, the proportion of firms looking to hire workers has been higher on only three occasions in the past 45 years.

In its report July 6, the government revised up its estimate of job growth in May and April by a combined 37,000.

The U.S. economy created more jobs than expected in June, but steady wage gains pointed to moderate inflation pressures that should keep the Federal Reserve on a path of gradual interest rate increases this year.

Economists had forecast that employers added 195,000 payrolls last month, according to the median estimate compiled by Bloomberg.

Other reports by Iphone Fresh

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