Booming US jobs market lifts chance of rate rise

This month's Employment Situation Report from the Bureau of Labor Statistics showed strong job creation, but the unemployment rate rose 0.2% to 4.0%, in an unexpected result.

Manufacturers added 36,000 jobs last month.

Still, average hourly pay rose just 2.7 per cent in June from 12 months earlier, meaning that after adjusting for inflation, wages remain almost flat.

The job growth shows the labour market shrugging off worries about a slowdown triggered by trade fights or rising borrowing costs.

Policymakers at the Federal Reserve, the United States central bank, monitor the report because they can raise interest rates when employment is close to full, wages are rising healthily and unemployment is low.

The June jobs report has a lot of rosy details in it. Additionally, the Trump administration has drawn attention to the record-low of African American unemployment, even as it remained higher than the overall rate at 5.9%. But for now the sector, which accounts for about 12 per cent of the US economy, appears in good health.

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Gross domestic product estimates for the April-June period are above a 4 per cent annualized rate, double the 2.0 per cent pace logged in the first quarter.

Now back to the number you are seeing in today's headline - the 4 percent unemployment rate. But retailers cut 21,600 jobs last month, after boosting payrolls by 25,100 in May. The agency says more people were seeking job opportunities and that forced the rate up to 6%.

Though economic growth appears to be solid, the gains have been spread unevenly.

Yet the tax cuts have done little to generate substantial pay growth.

"He pointed to minutes from the June Federal Open Market Committee, which indicate that some business leaders' "'plans for capital spending had been scaled back or postponed, '" which will likely also affect hiring. But the rate rose for an encouraging reason: More people felt it was a good time to begin looking for a job, though not all of them immediately found one. On Thursday, Trump floated the prospect of imposing tariffs on more than $500 billion in Chinese imports. Automakers added 12,000 jobs in June.

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