Hiring Rebounds In June As Employers Add 224000 Jobs

Ann Santiago
July 7, 2019

US job growth rebounded strongly in June, with government payrolls surging, but persistent moderate wage gains and mounting evidence the economy was losing momentum could still encourage the Federal Reserve to cut interest rates this month. After an unexpectedly weak May, the vigorous June rebound delighted President Donald Trump, who is preparing to seek reelection next year.

The President has repeatedly bashed Jerome Powell - his pick to lead the U.S. central bank - for raising rates a year ago just as Republicans were trying to goose the economy with tax cuts.

"Our country continues to do really well", but "If we had a Fed that would lower interest rates, we would be like a rocket ship", he told reporters at the White House.

But, President Trump said that the economy would, but "we don't have a Fed that knows what they're doing".

The Bureau of Labor Statistics reported that the economy added 224,000 jobs in June, a sharp bounce back from the revised figure of 72,000 jobs reported for May. Despite the continued low unemployment rates over the past year, some workers may still be on the sidelines, a situation economists refer to as "labor slack".

The Dow Jones Industrial Average ended the holiday-shortened week at 26,922.12, down 0.2 per cent compared to Wednesday's close. Will the Fed disappoint?

On Friday, the Fed emphasized that it would act as necessary to sustain the economic expansion, while noting that most Fed officials have lowered their expectations for the course of rates.

Investors, in particular, are grappling with an environment in which bad news is good news, and vice versa. "An insurance cut by definition means getting ahead of a downturn, and waiting for employment to roll likely means being too late to deliver one".

Employment in other major industries, including mining, wholesale trade, retail trade, information, financial activities, leisure and hospitality, and government, showed little change over the month.

The surprisingly strong number - the best job monthly growth recorded since January - is obviously good news for USA president Donald Trump, who is banking on sustained economic expansion as his ticket to reelection next November. The S&P 500 was down 15.15 points, or 0.51 percent, to 2,980.67.

Last month, average hourly earnings climbed 3.1% from a year earlier, and the labor force participation rate remained steady at 62.9%.

Stocks headed lower from the get-go Friday after the Labor Department said that employers added a robust 224,000 jobs in June.

Shelton, who Trump named Tuesday as a nominee for one of the two open Fed board positions, said the economy isn't registering inflation on the horizon and the strong June jobs report indicates that the administration's pro-growth policies are working.

The central bank is poised to cut rates by as much as half a percentage point by the end of the year.

European stock markets will continue to focus on issues within their own markets such as the Brexit developments. "This Fed won't disappoint".

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