Economy

US adds a solid 213,000 jobs; unemployment up to 4 percent

US adds a solid 213,000 jobs; unemployment up to 4 percent”

- USA job growth increased more than expected in June as manufacturers stepped up hiring, but steady wage gains pointed to moderate inflation pressures that should keep the Federal Reserve on a path of gradual interest rate increases.

Overall, unemployment inched up to 4 percent last month, largely due to the expanding pool of people actively seeking jobs.

The report also shows that the share of workers who have multiple jobs remained stable over the a year ago at 4.8 percent.

June's moderate wage growth should, for now, allay fears of the economy overheating.

This suggests that these 600,000 newly available workers can quickly find work if they have the right skills and that the unemployment rate will very swiftly fall back. The driving force behind the surge, however, is frictional unemployment, characterized by workers' confidence to switch jobs in today's economic climate.

According to the BLS report, titled "The Employment Situation-June 2018", total nonfarm employment increased by 213,000 in June. Manufacturing led the way with an increase of 36,000 jobs, 12,000 of which were in autos.

Signs of the Trump administration's trade war with China and did not show up in the report.

So far this year, the USA economy has added an average of 215,000 jobs per month.

What about tariffs? On Friday, the USA formally imposed an additional $34 million in tariffs on China.

In the past three months, the United States has increased 211,000 jobs monthly on average. The average hourly wage has increased by just 2.7 percent in the previous year. The low jobless rate has yet to force employers to offer higher wages in order to fill job openings.

While economists say the tax cuts are boosting growth this year, they warn that Trump's actions on trade could have damaging impacts on the economy and jobs.

Professional and business services drove almost a quarter of US job growth in June.

"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.

For many, the jobs numbers helped reinforce their predictions.

"It's hard to fathom how the robust manufacturing conditions will be sustained", said Joe Brusuelas, chief economist at RSM in NY. These people ultimately are classified as discouraged workers, who first fall down into a subset of the unemployment statistics (where the unemployment rate is now 7.8 percent in June compared with 7.6 percent in May) until they ultimately disappear completely from the workforce.

Update: Here's another chart, this one showing monthly job losses/gains in just the private sector since the start of the Great Recession.



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