U.S. Added 213,000 Jobs in June, Unemployment Increases From 3.8 to 4 Percent

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July 6, 2018

The Bureau of Labor Statistics released the June 2018 jobs report Friday, showing payroll employment was up by 213,000 and many sectors added jobs. The unemployment rate nevertheless saw a small uptick.

Most analysts predicted 195,000 jobs would be added, leaving the actual numbers coming out better than predicted. Professional and business services, manufacturing, health care, construction, and mining all added jobs in June. Only retail showed a significant loss while many other sectors remained largely unchanged.

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. This showed a slight improvement in those who decided to go into the workforce.

Average hourly earnings rose five cents, or 0.2 percent in June after increasing 0.3 percent in May.

In the face of generally positive numbers, the unemployment rate rose by 0.2 percent from May – when it reached an 18-year low of 3.8 percent – to the current 4.0 percent. The number who became unemployed in June – 499,000 – brought the total of 6.6 million. Despite the monthly setback, the current unemployment rate is nonetheless lower than the rate a year ago June when the jobless rate was 4.3 percent and 7 million people were unemployed.

The latest jobs report overall showed encouraging signs for the U.S. economy, the New York Times reports.

Arriving on the ninth anniversary of the recession’s end, the latest jobs numbers cap a string of encouraging economic reports. Many estimates for growth in the second quarter are bouncing above 4 percent. The manufacturing sector buzzed with activity last month, and spending on construction rose. New jobless claims are dragging along at historically low levels. And many consumers displayed their confidence in the economy by kicking off the summer with a new car purchase.

"I’m really excited to see that the labor force is growing," said Catherine Barrera, chief economist of the online job site ZipRecruiter. "There were some people who weren’t participating in the labor force who are now being encouraged to return, so I’m not concerned about the uptick in unemployment."

"The trends are strong," said Jim O’Sullivan, chief economist of High Frequency Economics. Over the past year, average monthly payroll gains have hovered around 200,000, and hiring has been running ahead of growth in the labor force. "There’s a gap there," he said, and without a steep and persistent plunge in hiring, "the unemployment rate is going to keep falling."

President Donald Trump and Republicans are running on a growing economy going into the 2018 midterm elections, especially since Trump signed the Republican tax reform plan into law at the end of 2017. However, fears of a trade war with other countries, especially China, have many worried the economy could slow down or shrink in the months ahead.