US economy

June jobs report: trade wars yet to have impact as employment rate rises

The US added 213,000 jobs in June as the unemployment rate ticked up to 4%, suggesting the start of an international trade war has so far done little to dent the robust jobs market.

The US has now added jobs every month for 93 months in a row – the longest such stretch since records began. The unemployment rate most likely rose as more people who were not looking for work started job searches.

There was more good news from previous months. Growth in employment for April was revised up from 159,000 to 175,000, and the change for May was revised up from 223,000 to 244,000.

But wage growth, which has been modest for a decade, lagged behind jobs growth again, rising just 2.7% from a year earlier.

Initial estimates show job growth in June being at 223,000. April’s figure was finalized at 175,000, while new estimates for May rest at 244,000
Numbers show that the unemployment rate rose to 4%

The latest report from the commerce department comes as the US and China slapped levies of $34bn on each other’s exports amid an escalating trade dispute that now involves all of the US’s largest trading partners.

On Thursday the Federal Reserve released the minutes of its latest meeting, noting that business contacts had “expressed concern about the possible adverse effects of tariffs and other proposed trade restrictions, both domestically and abroad, on future investment activity”.

But so far those concerns have not led to a fall in hiring. The report comes after ADP, the US’s largest payroll supplier, said the private sector had added 177,000 jobs in June.

Mark Zandi, chief economist of Moody’s Analytics, which helps compile the report, said the tight job market, not the trade dispute, was currently the biggest problem faced by US business.

“Business’ number one problem is finding qualified workers. At the current pace of job growth, if sustained, this problem is set to get much worse. These labor shortages will only intensify across all industries and company sizes,” said Zandi.

Economists had been expecting the economy to add 195,000 new jobs over the month and for the unemployment rate to remain steady at 3.8%. The unemployment rate rose in June as 601,000 people entered the job market and the labor force participation rate, which measures the percentage of the workforce in employment or looking for work, edged up to 62.9%.

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