Thursday, 20 September, 2018

Booming US jobs market lifts chance of rate rise

Nellie Chapman | 08 July, 2018, 17:55

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 employment-population ratio, another broad measure of labor- market health, was unchanged at 60.4 percent. The EPOP for prime-age workers (ages 25 to 54) edged up to 79.3 percent, tying the high for the recovery reached in February.

Strong jobs growth continues at a time when the economy is growing 4%, and inflation is about to break 3%.

From Table B-3, average hourly earnings were +2.7% year over year in June economy-wide, while average weekly earnings were +3.0%.

Automakers added 12,000 jobs in June, but the tariffs could weigh on that industry's job growth in the coming months. This suggests difficulties of finding qualified workers are hugely overstated. "However, the ongoing trade war with China and our allies could hurt investment spending and hold back job and wage gains". Construction added 13,000 jobs, while retail lost 22,000 - nearly all the jobs it had gained the month before. The department also boosted its estimate for April job growth up to 175,000 - up from an earlier assessment of 159,000.

Update: Here's another chart, this one showing monthly job losses/gains in just the private sector since the start of the Great Recession.

The economy has now been adding jobs for almost eight years - its longest streak on record.The U.S.is considered at near full employment, and the biggest challenge in the job market is the lack of available workers - a record 6.7 million jobs remain unfilled. But, among them, there are over 5.6 million who'd like a job, according to the BLS. That was the first increase in the jobless rate in 10 months.

The news in the household survey was mostly positive.

This may seem freaky on a number of levels - the person might have stopped looking because she feels her search is hopeless, or because he no longer wants a job. The unemployment rate nevertheless saw a small uptick.

The percentage of unemployment attributable to voluntary quits fell to 12.4 percent, more than reversing a big jump reported in May. That tepid increase to an average of $26.98 per hour, however, is due to the disproportionately high number of positions filled by job seekers with high-school diplomas, who generally receive lower wages. The breakdown of the gains however was less rosy - centered around self- employment, part-time work and the public sector. It is now unchanged for the a year ago, half a percentage point above its prerecession level.

In another sign of vigorous demand for labor, the results for April and May were revised higher by a total of 37,000, bringing the average for the past three months to 211,000.

Last month, U.S. employers added 213,000 jobs, exceeding already high expectations of 195,000. Support our work with a donation now!