Employment gains, job hunter influx clears way for rate hike

The U.S. economy added 213,000 jobs in June, as unemployment rose to 4 percent

The U.S. economy added 213,000 jobs in June, as unemployment rose to 4 percent

Last month, United States employers added an extra 213,000 jobs which was higher than the expected figure thus extending America's long-running growth line.

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

Last month, President Trump broke with long-standing practice and tweeted about the jobs report prior to its official 8:30 a.m. release, prompting markets to move.

Regina, Saskatchewan has a higher unemployment rate than Windsor, but may actually have more people working. An acceleration of this rate would have shown that employers were indeed paying up for the skilled workers they say are in decreasing supply.

Tapping into the potential pool of those who have given up looking for work, the job market seems to still have room for improvement.

Arriving on the ninth anniversary of the recession's end, the latest jobs numbers cap a string of encouraging economic reports.

"I'm really excited to see that the labor force is growing", said Catherine Barrera, chief economist of the online job site ZipRecruiter. Manufacturing led the way with an increase of 36,000 jobs, 12,000 of which were in autos.

The Trump administration has also applied tariffs on steel and aluminum from allies like Canada and Mexico and has threatened to abandon the North American Free Trade Agreement with those two countries.

The United States has increased jobs monthly for more than seven years, but some analysts suggest that the escalating trade disputes between the USA and its allies could threaten growth.

What about tariffs? On Friday, the US formally imposed an additional $34 million in tariffs on China. "While initial jobless claims rebounded during the payroll month-averaging 224k vs. 214k in May-they remain at very low levels, and continuing claims have continued to decline".

Nonetheless, the USA 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. Average hourly earnings are 2.7 percent higher than a year ago, a lackluster pace compared to past eras of healthy job growth when wages were rising at 3.5 percent or more a year. Some economists project economic output rose at better than 4% annual pace in the second quarter for the first time since 2014.

In spite of the strong job gains and widely voiced complaints from employers about difficulties in finding workers, wage growth does not appear to be accelerating.

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. Professional and technical services added 25,100 jobs in June, more than its average of 18,900 over the previous year.

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