After hitting an 18-year low of 3.8% in May 2018, the unemployment rate inched up to 4% in June because another 600,000 Americans joined the work force.
“Admittedly, the unemployment rate did rebound to 4.0%, from 3.8%, but that was only due to a 601,000 surge in the labor force,” noted analysts at Capital Economics, as quoted by MarketWatch.
The best part – the U.S. created 213,000 new jobs in June. Analysts had only expected a gain of 200,000 jobs. April 2018 and May 2018 jobs were also revised up by a total of 37,000 jobs.
In fact, April jobs were revised from 159,000 to 175,000.
May jobs were revised from 223,000 to 244,000.
That means the U.S. economy has now added jobs for the 93rd straight month.
“It’s a good thing. There are more people coming into the labor force,” note analysts at S&P Global ratings, as quoted by CNN Money. “It indicates that we have more labor market slack.”
Every sector of the economy added workers in June with the exception of retail, which lost 22,000 jobs. In fact, according to the June unemployment report, Manufacturing added 36,000 jobs. Motor vehicles and parts also added jobs over the month (+12,000), after declining by 8,000 in May. Employment in health care rose by 25,000 in June and has increased by 309,000 so far this year. Hospitals added 11,000 jobs over the month, and employment in ambulatory health care services continued to trend up (+14,000).
Construction employment moved up 13,000 jobs in June and has increased by 282,000 over the year. Mining employment added 5,000 in June. The industry has increased by 95,000 jobs since a recent low point in October 2016, almost entirely in support activities for mining.
The only sector to lose jobs was retail, which lost 22,000 after an addition of 25,000 in May.
Unfortunately, there was some disappointment in the average hourly earnings report, which missed expectations of a 2.8% year over year increase. However, it didn’t miss that goal by much, with an increase of 2.7% year over year. The number was a little better on a weekly basis with a gain of 3%.
“The top level takeaway is that the labor market remains consistent with robust economic growth but not yet tight enough to generate the kind of upward inflation pressures that would encourage the Fed to raise rates more rapidly. Today’s number is a very nice mix for risk assets—strong growth but still room for the Fed to move only gradually. I continue to expect rate hikes at quarterly intervals for the foreseeable future, but nothing more aggressive than that,” noted analysts at Alliance Bernstein, as quoted by MarketWatch.
Clearly, the report shows that the nearly nine-year economic expansion — the second longest on record — remains on track, as employers continue to shrug off global trade disputes.
Going forward, economists expect for the unemployment rate to sink to 3.5% this year, as jobs growth continues to impress.
In short, the economy is doing just fine, presenting us with plenty of opportunities to profit from the expansion.