Another strong jobs report. Here's why unemployment jumped

The U.S. economy added 213,000 jobs in June, as unemployment rose to 4 percent

U.S. non-farm payrolls increased by rose by 213,000 jobs last month, the Labor Department said today.

The U.S. economy added 213,000 jobs in June, cueing to the growth momentum employers are capitalizing on, despite mounting concerns of a potential global trade war. With less than half of new job seekers finding work, the labour force increase boosted the unemployment rate to an eight-month high of 6 per cent. Employment jumped by 31,800 last month.

Wages were being carefully watched by economists for signs of inflationary pressures building in the economy, with average hourly earnings forecast to have risen 0.3% over last month in June and 2.8% over the same month past year.

The growing optimism that people can find work suggested that the 9-year old US economic expansion - the second-longest on record - has the momentum to keep chugging along.

The Fed is also gradually raising interest rates, easing off the extraordinary efforts it took to stimulate the economy after the Great Recession and looking instead to ward off future spikes in inflation.

Although the report for June was far from uniformly strong, it will reinforce the perception that the USA will continue to outpace other countries and should be able to navigate trade policy uncertainties as long as they don't lead to a full-blown global trade war.

Because it means that more people are starting to look for jobs.

Economists say the effects could include companies freezing future investment and potentially additional hiring, which would eventually have a cooling effect on the jobs figures in coming months.

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.

The national jobless rate climbed 0.2% last month.

The big news from the Labor Department's employment report Friday is that 601,000 Americans re-entered the workforce in June.

Even nicer, another 37,000 new jobs were added to April and May.

A healthy gain of 31,800 jobs last month wasn't enough to keep Canada's unemployment rate from rising to six per cent as more people searched for work.

Nearly half of June's construction jobs increase (+13,000) occurred in the "heavy and civil engineering" category, +6,000. It's the 93rd consecutive month of job gains, an impressively long and strong stretch of growth.

Just hours before the monthly reports came out, the Trump administration imposed tariffs on $34 billion worth of Chinese imports, prompting the Asian country to immediately reiterate. And as is the case in most months, professional and business services as well as education and health services were the sectors that saw the largest increase in employment, with 50,000 and 54,000 jobs added in these sectors respectively.

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