Economy adds 224,000 jobs in June rebound

Economy adds 224,000 jobs in June rebound

Economy adds 224,000 jobs in June rebound

With July marking the longest economic expansion on record, it is a testament to the strength of the Administration's economic policies that the economy continues to generate monthly job gains of this magnitude.

Federal Reserve officials continue to keep a close eye on the job numbers, CNBC reported.

The Fed will be closely watched in the coming week as Chairman Powell heads to Capitol Hill next Wednesday and Thursday for back-to-back days of Congressional testimony.

Markets have been widely anticipating that the central bank will cut its benchmark interest rate later this month, regardless of what the June payrolls count showed.

In point of fact, lack of solid evidence that rising bitterness between Washington and Beijing would be resolved in a near-term outlook, had been forcing Federal Reserve to throttle on rate cut policy, though a majority of United States banks had been quoted saying that an interest rate cut might not come until August. Government bond yields surged, with the benchmark 10-year note up almost 10 basis points to about 2.05%.

As a result, wage growth appears to have kept the rate cut argument intact, with the brighter payroll additions weakening the case for a more dramatic rate cut.

US President Donald Trump has urged the Fed repeatedly to cut interest rates. The Fed last month opened the door to an interest rate cut amid rising uncertainties about the economy, including Trump's multifront trade conflicts.

Job gains mainly occurred in professional and business services, health care, transportation and warehousing, the bureau said.

US job growth probably rebounded in June, with wage gains anticipated to pick up.

Average hourly earnings rose six cents or 0.2% in June after gaining 0.3% in May.

Average weekly hours were unchanged at 34.4.

A broader measure of unemployment, which includes people who want to work but have given up searching and those working part-time because they can not find full-time employment, rose to 7.2% in June from 7.1% in May.

In conjunction with June's payroll data, the BLS revised May employment numbers down from positive 75,000 to 72,000, while the April number was also lowered from 224,000 to 216,000. The labor force participation rate increased one-tenth to 62.9%, its best since March, pushing up the headline and "real" unemployment rates.

Those not in the labor force fell by 158,000 to 96.1 million. Growth in the services sector, which includes such varied industries as restaurants, finance and recreation, slowed in June.

Manufacturing activity of late has been showing signs of contracting as corporate executives complain of increased prices due to tariffs the USA has imposed against its trading partners.

The pullback by treasuries came in reaction to the release of a closely watched Labor Department report showing a substantial reacceleration in the pace of USA job growth in the month of June.

This healthy jobs report, however, could give the Fed pause. "We will have to see whether the equity markets can shrug that off when balanced against other macroeconomic factors, such as the hope of a China trade truce". The Fed in its semi-annual report to Congress on Friday repeated its pledge to "act as appropriate" to sustain economic growth. The stock market, though, was encouraged by results from G-20 negotiations last week that ended with the USA and China promising no additional tariffs.

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