How the higher unemployment rate is actually a good sign

The U.S. economy added 213,000 jobs in June, as unemployment rose to 4 percent

The U.S. economy added 213,000 jobs in June, as unemployment rose to 4 percent

The economy added 213,000 jobs in June and BLS also revised up employment growth for April (159,000 to 175,000) and May (223,000 to 244,000) expanding the number of employed by 2.4 million over the past year.

The growing optimism that people can find work suggested that the 9-year old US economic expansion - the second-longest on record - has the momentum to keep chugging along.

But the Trump administration's "America First" trade policy, which has tipped the United States into a trade war with China poses a risk to the labor market and economy.

What about tariffs? On Friday, the US formally imposed an additional $34 million in tariffs on China.

President Donald Trump has imposed tariffs on a range of imported goods, including steel and aluminum, to protect domestic industries from what he says is unfair competition from foreign manufacturers.

Economists have warned the tit-for-tat import tariffs could disrupt the supply chain, undermine business investment and raise prices for consumers, and wipe out the stimulus from a $1.5 trillion tax cut package that came into effect in January. More than 600,000 workers joined the economy last month, bringing the total labor force participation rate to 62.9 percent.

"A 32K rise in employment was refreshing news after a couple of weak months".

Workers who haven't gone to college accounted for all of this month's net increase in the labor force and employment. With upward revisions to the data from the prior two months, the average gain over the last three months was 211,000. Wage growth remained sluggish, however, and was effectively erased by inflation: average hourly earnings rose just 0.2 percent to $26.98, putting wages up 2.7 percent over the same month previous year, the same as the 2.7 percent rise in the Consumer Price Index.

Amid news of May's record-low unemployment rate, House Minority Leader Nancy Pelosi (D-Calif.) shifted attention to allegedly stagnant wage growth under Trump. Economists expect inflation will hover around its target because of labor market tightness.

The overall picture is again one of a strengthening labor market, but one that is still not tight enough to produce substantial wage growth.

The percentage of unemployment attributable to voluntary quits fell to 12.4 percent, more than reversing a big jump reported in May. Prices for longer-dated U.S. Treasuries rose.

The news in the household survey was mostly positive.

"Contacts expressed concern about the possible adverse effects of tariffs and other proposed trade restrictions", the Fed said in minutes published Thursday.

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