Labor Department Announces an Increase in US Jobs By 213,000
Last month, US employers added an extra 213,000 jobs which was higher than the expected figure thus extending America’s long-running growth line. Some of the sectors that contributed to the growth include manufacturing which powered the growth by adding 36,000 jobs.
However, the retail sector shed 22,000 jobs. Additionally, the unemployment rate rose to 4 percent from 3.8 percent even as the labor market encouraged people to seek employment. Nevertheless, the yearly rise in average hourly earnings remains unchanged at 2.7 percent.
The United States has increased jobs monthly for more than seven years, but some analysts suggest that the escalating trade disputes between the US and its allies could threaten growth. Moreover, the increased borrowing costs could lead to dampening of economic activity.
On Friday, the world witnessed the imposition of new tariffs by the US and China on goods worth $34bn from each of the two countries. Meanwhile, the labor market seems to be ignoring all concerns raised concerning the new measures.
The Labor Department has said that apart from the additional 213,000 jobs in June, another 37,000 extra jobs were created in April and May, which was again more than the estimates.
In the past three months, the United States has increased 211,000 jobs monthly on average. The increase is above the gains required for the accommodation of the population growth and about 20,000 more compared to last year’s average during the same period.
These figures are capable of creating confidence in the economy of the US. Economists project that the GDP growth will maintain the yearly pace of 4% or even higher in the second quarter. However, the official figures are yet to be released till later this month.
Analysts have been puzzled by the consistency of the modest gain in wages irrespective of the growth. They assert that companies should be ready to increase the wages in the wake of a heated-up economy and increase in competition for workers.
In April, there were up to 6.7 million job openings in the United States; the number was more than the people who were unemployed but were seeking unemployment. Nevertheless, even without significant gains in wages, the labor market seems to be attracting people from the sidelines.
Moreover, the number of people looking for work increased by 601,000 in June which happens to be the largest since February. Also, more than 200,000 of these people were making a re-entry into the labor force.
Satyam Panday of S&P Global Ratings, says that considering the economic momentum, there are chances of steady labor force participation as well as a reduced unemployment rate come the second half of 2018.