Jobs growth declined in June


A man working in a factory is pictured. | AP Photo

The unemployment rate ticked up to 4 percent after falling to 3.8 percent in May. | Erik Schelzig/AP Photo

The tight labor market continued to produce bafflingly weak wage growth.

Updated


Job growth decelerated in June, the government reported Friday, as employers struggled to find qualified workers to fill an abundance of job openings.

The Labor Department reported 213,000 new jobs in June, down from 244,000 added in May. Unemployment ticked up to 4 percent after falling to 3.8 percent in May.

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Nevertheless, the White House, in a statement, described the numbers as the “latest in a string of positive headlines showing that confidence is surging, growth is accelerating and jobs are plentiful in the Trump economy.“

But the tight labor market continued to produce bafflingly weak wage growth, with average hourly earnings up 2.7 percent over the previous year, unchanged from May.

Although government data show there are roughly enough jobs for every person seeking one, experts say businesses are struggling to find qualified applicants.

“That’s the No. 1 issue,” said Dan North, chief economist for Euler Hermes North America. “We’re desperate for labor.”

The labor force participation rate — the share of people actively looking for a job — edged closer to 63 percent in June, still near its lowest level since the 1970s. The 0.2 percentage-point rise mirrored the rise in unemployment, signaling that more people began looking for work in June.

Labor Secretary Alexander Acosta noted in a written statement that “Americans rejoining the workforce represented their largest share of the unemployed since before the recession.“ Unemployment is “increasing for positive reasons as more workers entered the labor force,” Elise Gould, a senior economist at the left-leaning Economic Policy Institute, agreed in a written statement.

The report came as President Donald Trump was preparing to impose tariffs on $34 billion of Chinese goods, edging toward a full-blown trade war. Business groups worry that Trump’s escalating trade war will pinch growth of the gross domestic product, which the Commerce Department last week calculated at 2 percent for the first quarter, and boost unemployment.

It’s a worry shared by Federal Reserve policymakers, who in a meeting last month said they were “concerned that such uncertainty and risks eventually could have negative effects,” according to minutes released Thursday.

“It’s just a free-floating anxiety about what the hell is going to happen,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

House Education and the Workforce Committee Ranking Member Bobby Scott (D-Va.) blamed the GOP tax cut, in part, for stagnant wage growth.

“The mirage of one-time bonuses has given way to the realization that many workers are still not getting a fair return on their work,” Scott said in a statement. “Rather than pursuing another failed experiment in trickle-down economics, we should be setting policies that are proven to improve the quality of life for workers and their families.“

Economists had been expecting job growth to slow down after months of strong gains as the economy neared full employment, and although it did, the June numbers still exceeded economists’ expectations. Job growth may continue to decelerate before November midterms elections, but many economists expect wage growth to become more brisk before the end of 2018.

“Wage growth is slowly but steadily accelerating,” said Mark Zandi, chief economist at Moody’s Analytics.

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