Article source: ConstructConnect
Strong U.S. Jobs Growth has Interest Rate Implications
The U.S. total number of jobs in June shot up by +224,000, according to the latest Employment Situation report from the Bureau of Labor Statistics (BLS). A slight rise in the ‘participation rate’, to 62.9% from 62.8% in May, caused June’s unemployment rate to climb a notch, from 3.6% to 3.7%. A 3.7% level of unemployment is still remarkably tight.
Everyone’s keeping a close eye out for signs of a weakening U.S. economy that would warrant an interest rate cut by the Federal Reserve (Graph 1). They won’t find justification for such a move in June’s jobs numbers. May’s lackluster +75,000 addition had pointed to trouble possibly brewing, but that’s become old news. It’s been superseded by fresh buoyancy.
It should be pointed out, however, that the jobs performances in some sectors have taken an interesting turn of late. This will be examined in the next section.
Worth noting, also, is that despite June’s strength, average monthly job creation in the U.S. so far in 2019 has been +172,000. With half a year having already sped by, +172,000 is a decline of more than a quarter (-26.8%) compared with January-to-June 2018’s average of +235,000.
