Published: Sun, July 08, 2018
Business | By Kate Woods

US adds 213000 jobs in June, but jobless rate rises to 4%

Nonetheless, the U.S. jobs market is incredibly hot right now with yesterday's NFIB jobs survey suggesting that in the small business sector, the proportion of firms looking to hire workers has been higher on only three occasions in the past 45 years.

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

As unemployment rose, the closely watched labor force participation rate also edged higher to 62.9 per cent, while the number of people counted as unemployed rose to 6.6 million people, up almost a half million.

But wage growth is still weak - an increase of just 5 cents an hour in June.

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The unemployment rate increased because more people were looking for jobs; the labor-force participation rate rose to 62.9% from 62.7%.

Manufacturing and health care added the most jobs in June - hospitals added 11,000 jobs over the course of the month - while the retail industry lost 22,000 positions, a disappointing turn from what had been an encouraging boost in May.

The national jobless rate climbed 0.2% last month. 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. Savings from the tax cuts enabled companies in the Standard & Poor's 500 stock index to buy back a record number of shares in the first three months of 2018. "This generates a rising standard of living and strong income growth".

Minutes of the Fed's June 12-13 policy meeting published on Thursday were upbeat on the labor market.

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As IJR previously reported, the economy saw many milestones during Trump's presidency.

The economy also faces a substantial threat from the trade tension with China and from other trade disputes with USA allies, including Canada and Europe. In H1 of previous year, the increase was 1.1 million. However, fears of a trade war with other countries, especially China, have many anxious the economy could slow down or shrink in the months ahead. The category, which includes computer systems designers, engineers, consultants and administrative staff, added 50,000 jobs during a robust month of hiring. More specifically, hiring in the manufacturing sector - which should be the most sensitive to retaliatory trade sanctions - is running at the fastest pace since 1998.

Matthieu Arseneau, deputy chief economist for the National Bank, said that since the start of 2018 total employment has registered a decline of 48,000 private-sector jobs.

"Overall, this "not too hot, not too cold" report supports our call for four Fed rate hikes in total this year", Gregory Daco, head of USA macroeconomics at Oxford Economics in NY, said in a note.

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