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U.S. payrolls rise 213 000, wage gains slow and unemployment rises

U.S. payrolls rise 213 000, wage gains slow and unemployment rises

Last month, U.S. employers added 213,000 jobs, exceeding already high expectations of 195,000.

Many analysts read the higher jobless rate as an encouraging sign because the influx of almost 76,000 job seekers back into the labour market last month suggested more people are optimistic they can find work thanks to the hotter economy.

Following these revisions, job growth in America has averaged 211,000 over the last three months - which is in line with what is needed to sustain a growing population.

Ontario added 34,900 jobs for an increase of 0.5 per cent compared with the previous month, while Saskatchewan posted its largest monthly gain in over six years with the creation of 8,300 positions, which represented 1.5 per cent growth.

There were a record 6.7 million unfilled jobs in April. "Over the month, job gains occurred in professional and business services, manufacturing, and health care, while employment in retail trade declined". Construction jobs have increased by 282,000 over the year to meet housing demand, and mining has tacked on 95,000 jobs as energy prices jump.

Analysts have been puzzled by the consistency of the modest gain in wages irrespective of the growth.

Sure, the unemployment rate rose, but that's because more people were drawn into the worker-friendly labor market, not because payroll gains were weak.

"If payroll growth remains anywhere near 200,000, the downward trend in the unemployment rate will return in due course", said Ian Shepherdson, chief economist of Pantheon Macroeconomics.




The latest data will probably not change the Federal Reserve's policy of gradually tightening interest rates and expecting two more interest-rate hikes by the end of the year. Asian unemployment increased to 3.2 percent from an extraordinary 2.1 percent in May. "Combined with additional jobs and steady hours, payrolls are up by 5 percent since June 2017".

The Trump administration has also applied tariffs on steel and aluminum from allies like Canada and Mexico and has threatened to abandon the North American Free Trade Agreement.

The labor force participation rate also went up by 0.2 percent to the current 62.9 percent after 601,000 joined the civilian labor force. The trick is keeping this momentum rolling ... restoring employment losses from the Great Recession and then building stronger job growth on top of that.

That said, the labor market isn't flawless.

The unemployment rate in June fell back slightly to 4.0% from 3.8% in May.

Nonetheless, an escalating trade war poses a clear threat.

The broader USA economy appears sturdy.

The economy also faces a substantial threat from the Trump administration's trade war with China and from other, ongoing trade disputes with USA allies, including Canada and Europe.

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