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08 July 2018, 10:30 | Kelvin Horton
US jobs growth stronger than expected
The economy has now been adding jobs for almost eight years - its longest streak on record.The U.S.is considered at near full employment, and the biggest challenge in the job market is the lack of available workers - a record 6.7 million jobs remain unfilled.
Black unemployment rose to 6.5 percent from a record low of 5.9 percent; the Hispanic rate fell to a record low of 4.6 percent. And companies have been offering more benefits to attract and retain their workers.
The Labor Department said that average hourly earnings rose five cents, or 0.2% in June after increasing 0.3% in May. Economists expect inflation will hover around its target because of labor market tightness. "Clearly there are some sectors like trucking where wages are going up, but warehousing wages really collapsed and are only now just $12 or $13 an hour". Wall Street welcomed the employment gains, sending the Standard & Poor's 500 up 0.9 percent on Friday. With 93 straight months of job growth - a historical record - many employers have said they're feeling pressure to raise wages. That was the first increase in the jobless rate in 10 months. Among the strongest industries for job growth during the month was manufacturing, which extended a surge in hiring by adding 36,000 jobs even with tariffs in place.
The mixed signals of rising unemployment amid continued hiring could strike a flat note at the White House as President Donald Trump has repeatedly taken credit for the historic low levels of unemployment. "It indicates that we have more labor market slack". "There were some people who weren't participating in the labor force who are now being encouraged to return, so I'm not concerned about the uptick in unemployment". It's "another strong month for jobs", CNN's Christine Romans told her viewers. In general, monthly payroll gains of around 100,000 - or even a bit less - are sufficient to keep pushing down the unemployment rate, according to economists.
Over the past year, it has added more than a half-million jobs.
But there is a matter about which the Chairman of the Fed, Jerome Powell, is beginning to express concern, the threat from an escalating tariff "war". Swonk said the industry "suffered a blow during the month as announced store closings finally kicked in". This extra labour supply has seemingly helped keep wage growth in check.
The economy also faces a substantial threat from the trade tension with China and from other trade disputes with US allies, including Canada and Europe. The U.S. central bank increased interest rates last month for the second time this year and has projected two more rate hikes by year end.
Trump and his senior team say a little pain will be worth it to get better trade terms from China, Europe and others.
"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 U.S. macroeconomics at Oxford Economics in NY, said in a note. She also worked at an investment firm in London.