USA unemployment rate jumps even though employers add more jobs than expected

Ford trucks rolls of the line at a plan in Ohio

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

Following weeks of uncertainty over the escalating trade war measures imposed by the United States on China and other economic rivals, USA stock indexes ended the week with a rally in response to Friday's release of the Bureau of Labor Statistics (BLS) June jobs report, which found that continued job growth has still not produced any significant increase in wages for workers. Additionally, the unemployment rate rose to 4 percent from 3.8 percent even as the labor market encouraged people to seek employment. The bank's overnight rate target is 1.25 per cent.

Manufacturing added 36,000 jobs, the most since December. "But they're going to have incentive to work, because the greatest social program is a job", he said in his announcement speech at Trump Tower. While 12.4 percent is still high for this recovery, it is well below the rates of more than 14 percent seen the last time the unemployment rate was this low in 1999 and 2000.

Average hourly pay rose just 2.7 percent in June from 12 months earlier.

It is unusual for monthly job numbers to be this high nine years into an expansion. "Similarly, it should ease the concerns of the hawks (at the Fed) who worry that the Fed's rate hike campaign is behind the curve".

Meanwhile, non-farm payroll employment increased by 213,000 last month, beating economists' expectation of 195,000 and indicating strong job growth.

As for the jobs-creation performance of the general and sub-trade contracting industry in June, however, the motion forward was a little disappointing, +13,000 jobs. Economists say the effects could include companies freezing future investment and potentially additional hiring, which would eventually have a cooling effect on the jobs figures in coming months.

"After an impressive performance in 2017, the Canadian labour market definitely took a breather in the first half of 2018", Arseneau wrote in a research note to clients.

The professional and business services sector added 50,000 new positions.

Wage growth remained sluggish, however, and was effectively erased by inflation: average hourly earnings rose just 0.2 percent to $26.98, putting wages up 2.7 percent over the same month past year, the same as the 2.7 percent rise in the Consumer Price Index.

TD senior economist Brian DePratto wrote in a note Friday that the "employment mix could have been a bit healthier, but it certainly could have been worse too". Imports were up a smaller 0.4 percent to $258.4 billion.



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