Published: Sun, July 08, 2018
Money | By Armando Alvarado

USA jobs growth stronger than expected

USA jobs growth stronger than expected

Data for April and May was revised to show 37,000 more jobs created than previously reported. With the job market expanding and new workers flooding in, some employers may not feel pressure to hike wages for their employees. This suggests renewed economic optimism among less-skilled or less-educated workers.

"We may be heading into a trade war but the good news is, the economy at least seems to have some good momentum", said Michael Feroli, chief USA economist at JPMorgan Chase & Co "We still have some capacity to grow above trend without triggering too much inflation worry". The drop in yields is making the U.S. Dollar a less attractive investment.

At the same time, the unemployment rate rose to 4 per cent from 3.8 per cent, the government said Friday, as more people began looking for a job and not all of them found one. Some 600,000 people entered the labor force in June, the Labor Department said.

But wage growth is still weak - an increase of just 5 cents an hour in June. Asian unemployment increased to 3.2 percent from an extraordinary 2.1 percent in May.

The result of these policies in the US and internationally has been a steep decline in the social position of the working class and a precipitous rise in social inequality, with over 90 percent of income gains going to the top 10 percent of households in the United States over this period.

Several measures showed that the labor market still has slack to absorb.

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The dollar fell to a three-week low against a basket of currencies on the employment report. Prices for U.S. Treasuries rose.

The news in the household survey was mostly positive.

Michael Gapen, chief USA economist at Barclays Plc in NY and a former Fed official, said that the boost in workers coming into the labour market bodes well for pushing down the unemployment rate again.

Minutes of the Fed's June 12-13 policy meeting published on Thursday were upbeat on the labor market. The central bank could stick to its plan to gradually increase interest rates. In June, it was 2.7%, staying the same as the previous month, and falling short of economists' expectations. The manufacturing sector buzzed with activity last month, and spending on construction rose. "But enjoy the good news in the June report", Holtz-Eakin said. "Unequivocally, this is a nightmare situation". 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. And the unemployment rate remains at its lowest in more than 18 years.

Businesses added 213,000 jobs to their payrolls in June, another strong month of gains. But retailers cut 21,600 jobs last month, after boosting payrolls by 25,100 in May.Government payrolls increased by 11,000 jobs in June. This article is strictly for informational purposes only.

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