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U.S. jobs growth stronger than expected

08 July 2018

Government payrolls increased by 11,000 jobs in June, boosted by local government hiring.

Therefore, June's level of total U.S.jobs is now +250,000 (i.e., the sum of 213,000 and 37,000) versus what was reported by the BLS a month ago.

The unemployment rate rose from an 18-year low of 3.8% to 4% but that was because more people were drawn into the strong labor market.

The United States has increased jobs monthly for more than seven years, but some analysts suggest that the escalating trade disputes between the USA and its allies could threaten growth. Yet its path ahead is uncertain.

"Leisure and hospitality" also registered a nice gain in jobs in the latest month, +25,000, led by "food services and drinking places", +16,000.

Economists polled by Reuters had forecast nonfarm payrolls increasing by 195,000 jobs last month and the unemployment rate steady at 3.8 percent.

Major U.S. stock indexes were mostly higher July 6 after the jobs report was issued, keeping the market on track for a weekly gain after two weeks of losses.

The combination of strong job growth with stagnant wages has been an ongoing pattern in jobs reports since the 2007-2008 financial crisis and subsequent "Great Recession".

Despite a relatively tight labour market, wage growth remains stuck in the 2 per cent range, with the annual gain of 2.7 per cent unchanged from May.

A closer look at the numbers shows Canada added 9,100 full-time jobs in June and 22,700 part-time positions.

Altogether, 285,000 new jobs have been added in the manufacturing sector in the past year.

Despite the low unemployment and struggles to find workers, companies still appear hesitant to significantly raise pay in many industries.

"In the past six months, people were just leaving right and left", she said. That was the first increase in the jobless rate in 10 months. It had declined for three straight months.

Mining employment continues to trend upward as the USA adds thousands of jobs in June. But in fact more people entering the workforce is a sign of optimism that jobs are available. Construction jobs have increased by 282,000 over the year to meet housing demand, and mining has tacked on 95,000 jobs as energy prices jump. In general, monthly payroll gains of around 100,000 - or even a bit less - are sufficient to keep pushing down the unemployment rate, according to economists.

President Donald Trump and Republicans are running on a growing economy going into the 2018 midterm elections, especially since Trump signed the Republican tax reform plan into law at the end of 2017.

However, the labour participation rate suggests the city had the lowest rate of labour participation or people who are employed, in the country.

The United States imposed the first duties on $34 billion in Chinese goods early Friday, and China immediately retaliated with levies on an equal amount of American goods, including heartland staples like soybeans, corn, pork and poultry. Traders said the report was more encouraging than discouraging in the wake of an escalating trade war between the USA and China. Trump has spoken about slapping tariffs on imported cars, trucks and auto parts, which General Motors has warned could hurt the USA auto industry and drive up vehicle prices.

Minutes of the Fed's June 12-13 policy meeting published on Thursday were upbeat on the labor market.

Manufacturers added 36,000 jobs last month; the education and health sector added 54,000. Some 1.2 million jobs have been created at the year's halfway point. More specifically, hiring in the manufacturing sector - which should be the most sensitive to retaliatory trade sanctions - is running at the fastest pace since 1998.

U.S. jobs growth stronger than expected