U.S. adds a solid 213,000 jobs as jobless rate rises

08 July, 2018, 16:53 | Author: Eric Barnett
  • The U.S. economy added 213,000 jobs in June, as unemployment rose to 4 percent

The latest jobs report comes less than a week before the Bank of Canada makes its next interest-rate decision.

The ranks of unemployed people seeking jobs jumped by 499,000 in June, which caused the unemployment rate to rise from its previous 18 year-low.

Economists had forecast that June would be another strong month for the US labor market, with nonfarm payrolls expected to have grown by 195,000 during the month with the unemployment rate expected to hold steady at an 18-year low of 3.8%, according to estimates compiled by Bloomberg. Pay increases remain the missing part. Neither the BLS report nor any of the establishment press outlets have sought to provide any explanation for this trend, which runs contrary to the commonly-accepted capitalist economic principle that a tighter labor market will result in higher wages as employers compete against one another for workers. That risks weighing on economic growth and the pace of hiring and investment.

Along with the 213,000 jobs added in June, the jobs numbers for April and May were also revised to include 37,000 additional new hires across those months, according to data released Friday by the Bureau of Labor Statistics. President Donald Trump's tax cuts have provided a dose of stimulus this year, but the benefits have been tilted significantly toward wealthy individuals and corporations. 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. "The impacts of the trade war are going to be more delayed and spread over time". That's an increase in total employment of a quarter of a million jobs. This was consistent with sectoral data pointing to a more dynamic manufacturing sector among others.

Hassett pointed to the increase in labor force participation for African American women and Hispanic men and women as an encouraging sign that people are being drawn back to work.


Workers who haven't gone to college accounted for all of this month's net increase in the labor force and employment.

"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. This uptick in people joining the workforce - there were 601,000 new entrants to the labor force in June - pushed up the unemployment rate.

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

Michael Gapen, chief U.S. economist at Barclays Plc in NY and a former Fed official, said that the boost in workers coming into the labour market bodes well for pushing down the unemployment rate again.

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