For June, U.S. adds jobs, but wages lag

For June, U.S. adds jobs, but wages lag

According to a government report on Friday, the US labor market continued to power forward in June, adding another 200,000 jobs.

- USA job growth increased more than expected in June as manufacturers stepped up hiring, but steady wage gains pointed to moderate inflation pressures that should keep the Federal Reserve on a path of gradual interest rate increases.

Economists had forecast that June would be another strong month for the US labor market, with nonfarm payrolls expected to have grown by 195,000 during the month with the unemployment rate expected to hold steady at an 18-year low of 3.8%, according to estimates compiled by Bloomberg. 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.

Hassett pointed to the increase in labor force participation for African American women and Hispanic men and women as an encouraging sign that people are being drawn back to work. This suggests the Federal Reserve needs to keep raising interest rates with at least two more rate hikes likely this year.

Canada's tight jobs market is beginning to bring more workers into the labour force, a trend that if sustained may moderate a recent pick up in wage pressures.

The bottom line is that the buoyancy in June's US labor market statistics will reaffirm the Federal Reserve's view that the economy is doing super-well at present and that further interest rate hikes will be justified.

Signs of strength have helped bolster hiring despite the difficulty many employers say they're having in finding enough qualified workers to fill jobs.

Leaders of Germany, Hungary trade barbs on migration
Orban responded that Hungary's position hasn't changed since it closed its borders to migrants during the influx of 2015. After a standoff, Malta let the boat dock but only if other countries offered to take a share of the migrants.

It is expected to hover around its target for a while, in part because of labor market tightness.

From Table B-3, average hourly earnings were +2.7% year over year in June economy-wide, while average weekly earnings were +3.0%. Fed officials last month boosted the number of interest-rate hikes they expect in 2018 to four from three.

Gross domestic product estimates for the April-June period are above a 4 percent annualized rate, double the 2.0 percent pace logged in the first quarter.

Jim O'Sullivan, chief United States economist at High Frequency Economics, said gains have averaged 215,000 month so far this year, up from 182,000 "more than strong enough to keep the unemployment rate trending down over time".

The gain in US total employment through the first half of this year has been 1.3 million jobs. Manufacturing and professional and business services saw gains, with 36,000 and 50,000 jobs added, respectively.

Yet another month of robust job creation showed that, despite complaints from companies nationwide about the worsening labour shortage, there remained untapped pockets of idled workers at last able to reenter the jobs market after almost a decade of economic recovery. Levies on $34 billion in Chinese goods took effect at 12:01 a.m. Friday.

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