Economy Adds 213,000 Jobs in June, Unemployment Edges Up to 4 Percent

Economy adds 213K jobs in June unemployment ticks up to 4 percent

Businesses added 213,000 jobs to their payrolls in June, another strong month of gains.

Manufacturers added 36,000 jobs last month; the education and health sector added 54,000. This caused the unemployment rate to tick up to 4% from 3.8% even as employers added 213,000 jobs, and it's more evidence that faster growth is luring more people back into the workforce. The average hourly wage has increased by just 2.7 percent in the a year ago.

The job growth shows the labour market shrugging off worries about a slowdown triggered by trade fights or rising borrowing costs.

In its report Friday, the government revised up its estimate of job growth in May and April by a combined 37,000.

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.

For workers, a hot job market is a good thing, resulting in what so far have been modest increases in wages. "There were some people who weren't participating in the labor force who are now being encouraged to return, so I'm not concerned about the uptick in unemployment", said Catherine Barrera, chief economist of the online job site ZipRecruiter.

While economists say the tax cuts are boosting growth this year, they warn that Trump's actions on trade could have damaging impacts on the economy and jobs. The rate is already below central bank estimates of levels sustainable in the long run, making it a potential source of upward pressure on wages and inflation. But retailers cut 21,600 jobs last month, after boosting payrolls by 25,100 in May.

Many analysts read the higher jobless rate as an encouraging sign because the influx of almost 76,000 job seekers back into the labour market last month suggested more people are optimistic they can find work thanks to the hotter economy.

What about tariffs? On Friday, the USA formally imposed an additional $34 million in tariffs on China.

In April, there were up to 6.7 million job openings in the United States; the number was more than the people who were unemployed but were seeking unemployment. According to Bank of America Merrill Lynch, average hourly earnings growth of more than 0.4% from last month and payrolls of less than 140,000 would "spook" investors. This was most due to a 1 percentage point rise in the unemployment rate for black women, although their EPOP also rose by 0.6 percentage points. Trump has spoken about slapping tariffs on imported cars, trucks and auto parts, which General Motors has warned could hurt the US auto industry and drive up vehicle prices.

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.

Nearly half of June's construction jobs increase (+13,000) occurred in the "heavy and civil engineering" category, +6,000. The category, which includes computer systems designers, engineers, consultants and administrative staff, added 50,000 jobs during a robust month of hiring.

The picture was brighter for the leisure and hospitality industry.

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