United States job growth strong; unemployment rate rises to 4.0 percent


According to a government report on Friday, the US labor market continued to power forward in June, adding another 200,000 jobs.

The job numbers for the month of June indicate USA manufacturing continues to gain momentum.

Economists have estimated that 195,000 jobs were added last month and that the unemployment rate remained at an 18-year low of 3.8 percent, according to data provider FactSet. The U.S. central bank raised interest rates last month for the second time this year and has projected two more rate hikes by year end. That tepid increase to an average of $26.98 per hour, however, is due to the disproportionately high number of positions filled by job seekers with high-school diplomas, who generally receive lower wages.

But that is good news for the Federal Reserve since they will not feel pressure to raise interest rates faster.

Still, if the additional jobs and that sort of wage growth don't make you smile, the rising unemployment rate should.

"The solid 213,000 gain in non-farm payrolls in June, which followed an even stronger 244,000 rise in May, illustrates that labor market conditions remain unusually strong", said Andrew Hunter, U.S. economist at Capital Economics. But in fact more people entering the workforce is a sign of optimism that jobs are available.

It is expected to hover around its target for a while, in part because of labor market tightness.

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The national jobless rate climbed 0.2% last month.

A new report released on Friday also shows unemployment rose by.2% to 4% total. However, fears of a trade war with other countries, especially China, have many anxious the economy could slow down or shrink in the months ahead.

The labor force expanded by 601,000 jobs over the month, with an influx of new women and teen workers more than offsetting a dip in labor force participation among men, said Gregory Daco of Oxford Economics. It's "another strong month for jobs", CNN's Christine Romans told her viewers.

At the same time, retail lost 22,000 jobs, partly because of the nationwide closing of Toys R Us stores, according to Gus Faucher, PNC's chief economist.

The details across industries showed continued strength in goods-producing jobs: Manufacturing added 36,000 to payrolls, the best month since December, including a 12,000 increase in the auto industry, the most since August. Over the past three months, the economy has produced a robust average monthly job gain of 211,000.

Hanging over the labour market are President Donald Trump's tariffs on goods from some of America's largest trading partners, along with retaliatory charges.

"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.