The US jobs report


The US jobs report

"The trend in employment growth remains more than strong enough to keep the unemployment rate trending down, which we expect will add to upward pressure on wages", said Jim O'Sullivan of High Frequency Economics.

The unemployment rate rose slightly, from 4.3 percent to 4.4 percent, according BLS.

The current labour force participation rate in the USA is 62.8 per cent, well down on its pre-2008 level, when it was as high as 66 per cent. In one positive sign, the average workweek rose by 0.1 hour to 34.5 hours.

Also, job growth in April and May was stronger than initially reported.

"After last month's surge in jobs activity, small-business owners seem to be in a holding pattern while they wait to see what Congress will do with taxes and healthcare", NFIB President and CEO Juanita Duggan said.

The recovery from the Great Recession is now more than 8 years old - unusually long for an economic expansion - and job growth is naturally slowing, he said.

The June jobs report showed broad hiring across numerous industries. "It creates a bit of a goldilocks backdrop for stocks".

The labor force participation rate rose a tenth of a point to 62.8 percent in June, which is within two-tenths of a point where it's been since January. Underemployment includes part-time workers who want a full-time job, as well as skilled workers who hold low-skill jobs.

Economists say this indicates that more Americans without jobs are getting off the sidelines and looking for work, a sign that the labor market still has room to strengthen and raises the prospect of greater wage growth, which has remained stuck - as it was in June - around the 2.5 percent mark, well below the 3.5 to 4 percent economists consider healthy. "If we don't see significant wage growth, it's unlikely we'll start to see a ramp-up of inflation anytime soon". "It really does say that we've got 2 percent-plus growth for the second half of the year".

June's mixed results will likely keep the Fed moving forward at a gradual pace.

The "real" unemployment rate, otherwise known as the U-6 measure, was 8.4 percent in May, which increased to 8.6 percent in June.

The Federal Reserve monitors the barometers of wage growth for any evidence that inflation might be starting to pick up.

Mark Zandi, chief economist at Moody's Analytics, said that many workers are too cautious to push for raises, partly because of the lingering impact of the Great Recession, when almost 9 million people lost jobs. Employers added 222,000 jobs this past month, surpassing several leading economists' predictions.



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