United States job growth strong but unemployment rate rises to 4%

Ford trucks rolls of the line at a plan in Ohio

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Economists surveyed by Bloomberg News had projected the unemployment rate would remain unchanged at 5.8 per cent, which matched the lowest on record.

The labor force expanded by 601,000 jobs over the month, with an influx of new women and teen workers more than offsetting a dip in labor force participation among men, said Gregory Daco of Oxford Economics. In spite of healthy job growth, wage growth is especially weak in manufacturing, rising just 1.7 percent over the previous year.

Workers who haven't gone to college accounted for all of this month's net increase in the labor force and employment.

Whether the unemployment rate jumped by 0.2 of a percentage point or 0.3, both were good signs for the economy. Huh?

Here's a piece of good news for US investors that will largely be buried because of the jobs report. The drop in yields is making the U.S. Dollar a less attractive investment.

Job growth this year has been faster than in 2017.

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The Labor Department's monthly jobs report will be released at 8:30 a.m. Manufacturing led the way with an increase of 36,000 jobs, 12,000 of which were in autos.

Washington is also engaged in fights with other major trade partners, including Canada, Mexico and the European Union after President Donald Trump imposed tariffs on steel and aluminum imports.

Meanwhile, non-farm payroll employment increased by 213,000 last month, beating economists' expectation of 195,000 and indicating strong job growth.

The bottom line is that the buoyancy in June's USA labor market statistics will reaffirm the Federal Reserve's view that the economy is doing super-well at present and that further interest rate hikes will be justified. But retailers cut 21,600 jobs last month, after boosting payrolls by 25,100 in May. A July 4 report by the Organization for Economic Cooperation and Development (OECD) found that among its 26 member countries, average nominal wage growth has slowed from an annual rate of 4.8 percent before the crash to just 2.1 percent. Wages continued their modest rise, increasing 2.7 percent from the year before.

According to the BLS report, titled "The Employment Situation-June 2018", total nonfarm employment increased by 213,000 in June.

Job openings are at record highs, meaning numerous job seekers are likely to find employment soon. However, Treasury yields are weaker as Average Hourly Earnings came in soft. Some recent reports have suggested that businesses can't find qualified workers at the wages they're offering - but this report "did not have any evidence to back up those claims", said Elise Gould, a senior economist with the Economic Policy Institute.

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