US job growth slowed more than expected in June after surging in the prior month, but labor market conditions remain tight, with the unemployment rate at 3,6 per cent – retreating from a seven-month high, according to official data.
US job growth slowed more than expected in June after surging in the prior month, but labor market conditions remain tight, with the unemployment rate at 3,6 per cent – retreating from a seven-month high, according to official data.
US nonfarm payrolls increased by 209,000 jobs last month, the Labor Department said in its employment report on July 7. The data for May was revised lower to show payrolls rising 306,000 instead of 339,000 as previously reported.
US nonfarm payrolls increased by 209,000 jobs last month, the Labor Department said in its employment report on July 7. The data for May was revised lower to show payrolls rising 306,000 instead of 339,000 as previously reported.
According to a poll conducted by news agency Reuters, economists had forecast payrolls rising 225,000. The economy needs to create 70,000-100,000 jobs per month to keep up with growth in the working-age population. Even though job growth is slowing, the labor market remains unbowed despite the US Federal Reserve delivering 500 basis points (bps) worth of rate hikes since March 2022 – when it embarked upon its fastest monetary policy tightening in more than 40 years.
According to a poll conducted by news agency Reuters, economists had forecast payrolls rising 225,000. The economy needs to create 70,000-100,000 jobs per month to keep up with growth in the working-age population. Even though job growth is slowing, the labor market remains unbowed despite the US Federal Reserve delivering 500 basis points (bps) worth of rate hikes since March 2022 – when it embarked upon its fastest monetary policy tightening in more than 40 years.
For now, it is helping the economy to defy the economists’ predictions of a recession. The average hourly earnings rose 0.4 per cent last month after climbing by the same margin in May. In the 12 months through June, wages increased 4.4 per cent, matching the May’s advance, according to official data.
For now, it is helping the economy to defy the economists’ predictions of a recession. The average hourly earnings rose 0.4 per cent last month after climbing by the same margin in May. In the 12 months through June, wages increased 4.4 per cent, matching the May’s advance, according to official data.
The annual wage growth remained high to be consistent with the Fed’s two per cent inflation target. Minority workers saw sharp gains in unemployment, with Black workers in particular now seeing several months of weaker employment. Women overall had a strong month, though, with the prime-age participation rate reaching a fresh high.
The annual wage growth remained high to be consistent with the Fed’s two per cent inflation target. Minority workers saw sharp gains in unemployment, with Black workers in particular now seeing several months of weaker employment. Women overall had a strong month, though, with the prime-age participation rate reaching a fresh high.
Most industries added jobs, with health care and government driving gains. The leisure and hospitality industry added a meager 21,000 jobs, while construction employment rose by 23,000, according to Bloomberg data.
Most industries added jobs, with health care and government driving gains. The leisure and hospitality industry added a meager 21,000 jobs, while construction employment rose by 23,000, according to Bloomberg data.
While the higher paying industries like technology and finance are purging workers, sectors like leisure and hospitality as well local government education are still catching up after losing employees and experiencing accelerated retirements during the COVID-19 pandemic.
While the higher paying industries like technology and finance are purging workers, sectors like leisure and hospitality as well local government education are still catching up after losing employees and experiencing accelerated retirements during the COVID-19 pandemic.
Companies are also hoarding workers, a legacy of the dire labor shortages experienced as the economy rebounded from the COVID-19 downturn in 2021 and early 2022. But some economists argued that worker hoarding was masking weakness in the economy, pointing to worker productivity, which slumped in the first quarter.
Companies are also hoarding workers, a legacy of the dire labor shortages experienced as the economy rebounded from the COVID-19 downturn in 2021 and early 2022. But some economists argued that worker hoarding was masking weakness in the economy, pointing to worker productivity, which slumped in the first quarter.
They also noted that while gross domestic product, the traditional measure of economic growth, was solid in the January-March quarter, an alternative gauge, gross domestic income, has contracted for two straight quarters.
They also noted that while gross domestic product, the traditional measure of economic growth, was solid in the January-March quarter, an alternative gauge, gross domestic income, has contracted for two straight quarters.
Economists reckon that even though businesses are content for now to continue hoarding workers, that could change once slowing consumer spending starts to erode profits – predicting major layoffs.
Economists reckon that even though businesses are content for now to continue hoarding workers, that could change once slowing consumer spending starts to erode profits – predicting major layoffs.
There are also concerns that the slowdown in wage growth, driven by the loss of high-paying technology and finance jobs among others, portends slower consumer spending, the main anchor of the US economy.
There are also concerns that the slowdown in wage growth, driven by the loss of high-paying technology and finance jobs among others, portends slower consumer spending, the main anchor of the US economy.
The US central bank is almost certain to resume raising interest rates later this month as signaled by hawkish remarks of Fed Chair Jerome Powell, after pausing in June.
The US central bank is almost certain to resume raising interest rates later this month as signaled by hawkish remarks of Fed Chair Jerome Powell, after pausing in June.
Briefing.com analyst Patrick O’Hare told news agency AFP that the ” US jobs report won’t change is the Fed’s view that additional tightening action is likely going to be appropriate”.
Briefing.com analyst Patrick O’Hare told news agency AFP that the ” US jobs report won’t change is the Fed’s view that additional tightening action is likely going to be appropriate”.
While the data fits the narrative of a soft landing of the US economy from the impact of interest rate hikes, the Fed will unlikely be reassured by growth in average hourly earnings accelerating.
While the data fits the narrative of a soft landing of the US economy from the impact of interest rate hikes, the Fed will unlikely be reassured by growth in average hourly earnings accelerating.
Thursday’s data showed that US private firms created twice as many jobs as expected in June, while the crucial services sector saw solid growth, according to AFP.
Thursday’s data showed that US private firms created twice as many jobs as expected in June, while the crucial services sector saw solid growth, according to AFP.
O’Hare added that the market is expecting an interest rate hike in July, but so far see less than 50 per cent chances of hikes in September, November and December meetings of Fed policymakers.
O’Hare added that the market is expecting an interest rate hike in July, but so far see less than 50 per cent chances of hikes in September, November and December meetings of Fed policymakers.
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