U.S. jobs growth stronger than expected

U.S. jobs growth stronger than expected

Rather than being an omen of bad things to come, the rise suggests a positive outlook for the USA economy as it coincides with more than 600,000 people entering the labor force. Revised figures for April and May bring the monthly average for this year to 214,000 jobs-up from 182,000 the year before. The economy needs to create roughly 120,000 jobs per month to keep up with growth in the working-age population. This suggests renewed economic optimism among less-skilled or less-educated workers.

Still, Satyam Panday of S&P Global Ratings summarized the view of economists that "Despite simmering trade tensions, hiring in the USA continues to stay strong".

Mike Segar/ReutersA boy rides a decorated bicycle down Main Street during the annual Fourth of July parade in Barnstable Village on Cape Cod, Massachusetts, U.S., July 4, 2018. Trump argues that the duties are necessary to protect domestic industries from what he says is unfair competition from foreign manufacturers.

The unemployment rate rose to 4.0 percent from an 18-year low of 3.8 percent in June as more people entered the labor force in a sign of confidence in the jobs market.

The United States has now added jobs for 93 straight months, a record streak of hiring. "While initial jobless claims rebounded during the payroll month-averaging 224k vs. 214k in May-they remain at very low levels, and continuing claims have continued to decline". The average hourly earnings of private-sector production and nonsupervisory employees increased by four cents to $22.62.

Under Trump, the economy also saw its highest number of job openings - 6.6 million, about the number of unemployed in April - since 2000.

The Fed raised its target range for the benchmark federal funds rate in June for the second time this year, and penciled in two more rate hikes in the second half of the year.

Steady hiring and low unemployment shows the labor market continues to be an area of strength for the economy since the recession ended nine years ago.

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

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Nonetheless, an escalating trade war poses a clear threat.

The dollar extended losses against the euro and the yen after the employment report. US stock index futures were little changed. Stocks on Wall Street were trading higher.

Nevertheless, the average monthly increase in US construction employment through the first half of this year has been +25,000, up from +20,000 for January-to-June of 2017. "There were some people who weren't participating in the labor force who are now being encouraged to return, so I'm not concerned about the uptick in unemployment". Moreover, some of the other internals, including a rising unemployment rate for African-Americans, highlighted the challenges to more inclusive growth.

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 this quarter. Manufacturing, construction and other sectors heavily reliant on trade are seen taking a big hit from the tariff wars.

Read the full report at CNS News. "Unequivocally, this is a nightmare situation".

US hiring topped forecasts in June while unemployment rose from an 18-year low and wage gains unexpectedly slowed, indicating the labor market has room to keep expanding.

Staffing in "professional and business services" (+50,000) received boosts from "temporary help services", +9,000; "architectural and engineering services", +7,000; and "computer systems design and related design", +6,000.

Ahead of this morning's new jobs report, most projections pointed to totals of roughly 200,000 new jobs last month.

The latest jobs report, which also contained weaker data points, arrived less than a week before the Bank of Canada's upcoming interest-rate decision next Wednesday.

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