Wage gains slow, unemployment up from 18-year low

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According to the latest BLS report, the leisure and hospitality sector added 25,000 jobs in the month of June, up 261,000 from the same time previous year.

Among industrial sub-sectors, the three standouts for jobs improvement in June were: "education and health services", +54,000; "professional and business services", +50,000; and in a long-time-coming and pleasantly-welcome development, "manufacturing", +36,000.

"The underlying fundamentals have been strong for quite some time and while we were a little surprised by the uptick in the unemployment rate, it appears to be caused by additional workers entering the labor force, which is a positive", Bedikian said. Average hourly earnings advanced 2.7 per cent from a year earlier, while the jobless rate increased to 4 per cent from 3.8 per cent, the first rise in nearly a year.

The job growth shows the labour market shrugging off worries about a slowdown triggered by trade fights or rising borrowing costs. That followed an increase of 5,000 jobs in May.

"Wages could rise at a faster pace in the future as the economy is humming and the labor market is tight", said Sung Won Sohn, chief economist at SS Economics in Los Angeles. Most economists say they still think the low unemployment rate will eventually force more employers to offer higher pay in order to fill jobs. That's consistent with other reports showing strength in factory activity.

A long run of impressive monthly job creation is among the main reasons why the projections of economists, in both the private and public sectors, have continued to be bullish for US growth, despite growing uncertainty about the rest of the global economy and the threat of a trade war. It increases pressure to raise wages, and even curbs business growth if there are not enough people to do the work.

"Retail" hiring, however, was down in the dumps, -22,000 jobs.

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Savings from the tax cuts enabled companies in the Standard & Poor's 500 stock index to buy back a record number of shares in the first three months of 2018.

Just hours before the monthly reports came out, the Trump administration imposed tariffs on $34 billion worth of Chinese imports, prompting the Asian country to immediately reiterate.

Economists have estimated that 195,000 jobs were added last month and that the unemployment rate remained at an 18-year low of 3.8 per cent, according to data provider FactSet.

A worker cuts a piece from a steel coil at the Novolipetsk Steel PAO steel mill in Farrell, Pennsylvania, U.S., March 9, 2018.

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 7.8 percent last month from a 17-year low of 7.6 percent in May. Hourly wages for private, non-farm jobs in the US increased by five cents to $26.98 per hour, according to the preliminary BLS data issued Friday. In May, the annual inflation rate rose to 2.8%, exceeding wage gains.

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.

"Leisure and hospitality" also registered a nice gain in jobs in the latest month, +25,000, led by "food services and drinking places", +16,000.

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