U.S. adds 213000 jobs in June, unemployment rate jumps to 4%

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

The unemployment rate rose to 4.0 percent from an 18-year low of 3.8 percent in June as 601,000 job seekers entered the labor force in a sign of confidence in the jobs market. That continues as employers consistently hire at robust rates and the unemployment rate keeps falling.

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

Job creation in the world's largest economy continued its brisk pace in June but the unemployment rate jumped as more people joined the hunt for employment, according to a government report Friday.

The average workweek for all employees on private nonfarm payrolls was unchanged at 34.5 hours in June. 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.

In Europe, the assault on working class wages and conditions has primarily taken the form of brutal austerity policies to slash social programs and increase the tax burden of workers to pay for the subsidies offered to European banks.

Black unemployment rose to 6.5 percent from a record low of 5.9 percent; the Hispanic rate fell to a record low of 4.6 percent.

The overall picture is again one of a strengthening labor market, but one that is still not tight enough to produce substantial wage growth.

"Contacts expressed concern about the possible adverse effects of tariffs and other proposed trade restrictions", the Fed said in minutes published Thursday.

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The bottom line is that the buoyancy in June's USA labor market statistics will reaffirm the Federal Reserve's view that the economy is doing super-well at present and that further interest rate hikes will be justified.

The dollar extended losses against the euro and the yen after the employment report.

A worker cuts a piece from a steel coil at the Novolipetsk Steel PAO steel mill in Farrell, Pennsylvania, U.S., March 9, 2018. The economy has added jobs every month for nearly eight years, the longest streak on record.

Michael Gapen, chief USA economist at Barclays Plc in NY and a former Fed official, said that the boost in workers coming into the labour market bodes well for pushing down the unemployment rate again.

The employment report together with data from the Commerce Department showing the trade deficit narrowed 6.6 percent to a 1-1/2-year low of $43.1 billion in May reinforced expectations of robust economic growth in the second quarter.

Gross domestic product estimates for the April-June period are above a 4 percent annualized rate, double the 2.0 percent pace logged in the first quarter. 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. There are also growing fears of global disruptions as a trade fight escalates between the USA and China. It's too soon to tell what impact they'll have - hiring in manufacturing continues to be strong, with 36,000 jobs added in June - but what we do know is that they are creating uncertainty, Hamrick said.

"Retail" hiring, however, was down in the dumps, -22,000 jobs. But retailers cut 21,600 jobs last month, after boosting payrolls by 25,100 in May.Government payrolls increased by 11,000 jobs in June.

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