The U.S. economy added 224,000 jobs in June, surpassing economists’ estimates and rebounding from May’s disappointing growth numbers. The unemployment rate rose to 3.7% in June, though this was likely due to a higher-than-usual 335,000 people entering the labor force this month.
Here are some of the highlights from the report.
1. Lots more jobs
Job creation in the US picked back up this month, adding a total of only 224,000 new jobs.
MarketWatch: “The U.S. added a robust 224,000 new jobs in June, rebounding from a recent lull and calming worries about the health of an economy now entering a record 11th year of expansion. The increase in new jobs easily beat the 170,000 forecast of economists polled by MarketWatch.”
USA Today: “Professional and business services led the job gains, with 51,000. Health care added 35,000 jobs; transportation and housing gained 24,000 jobs; and construction increased by 21,000 jobs.”
The New York Times: “Notably, the manufacturing sector added 17,000 jobs after two straight months of adding a mere 3,000.”
2. Wage growth continues to fall short of expectations
While average hourly earnings did rise slightly, the increase fell short of economists’ expectations.
CNN: “The one still-disappointing number: Average hourly earnings, which rose 3.1% from a year earlier, slightly lower than forecast. While still beating inflation, wages should be growing faster this late in the business cycle, as employers compete to attract workers.”
Vox: “Yet all this good news doesn’t mean much to middle- and working-class families: Workers only got an average hourly pay raise of 6 cents in June, even less than they got in May. Job security is the only benefit employees can count on these days.”
3. What will the Fed do?
While many investors were confident that the Fed would cut interest rates later this month, especially after May’s low growth numbers, this month’s rebound may complicate matters.
Fox Business: “The report was critical for the Federal Reserve's meeting at the end of July, and could give policymakers at the U.S. central bank pausing about lowering the benchmark federal funds rate, despite pressure from the White House to do so.”
The New York Times: “The new numbers might even be good enough to cause the Federal Reserve to rethink its plans to cut interest rates. That, at least, was the worry evident in financial markets Friday morning, as the stock market fell and interest rates on Treasury bonds rose.”
Yahoo! Finance: “The U.S. central bank last month signaled it could ease monetary policy as early as this month citing low inflation as well as growing risks to the economy from an escalation in trade tensions between Washington and Beijing.”