Booming US labour market draws new jobseekers


Participation in the US labour market surged in June as workers that had been sidelined from employment started looking for a job again.

The labour force grew by 601,000 with the percentage of the US population in work or looking for work rising 0.2 per cent to 62.9 per cent.

The rise in the supply of workers helped push the unemployment rate back up to 4 per cent, marking the first rise in the number in almost a year, following the 18-year low of 3.8 per cent reached in May. It also weighed on wage growth, said analysts, which rose 2.7 per cent from a year ago, or below expectations.

Nonetheless, the numbers have been taken as a sign of strength in the jobs market, with companies drawing people back into the labour force.

The number of new people in employment rose above expectations, climbing by 213,000 in June, and with a revision pushing May’s jobs growth even higher.

“It’s a testament to the health of the economy and the demand for workers,” said David Lebovitz, global market strategist at JPMorgan Asset Management. “People keep coming back into the labour force.”

The numbers steady the Federal Reserve’s hand, with the muted wage growth tempering fears that runaway inflation would force the central bank into raising rates more quickly than anticipated.

The US dollar fell after the jobs numbers were released, but was already under pressure from worsening trade disputes. The DXY index, which tracks the US currency against a weighted basket of global peers, was down 0.5 per cent at 94.022 about an hour after the release, double its decline ahead of the data.

Wall Street was higher in early trading, with the S&P 500 up 0.2 per cent. The yield on the benchmark US 10-year Treasury fell, down 2.4 basis points at 2.82 per cent, while the two-year yield, which is more sensitive to Fed policy expectations, was down 1.6 bps at 2.55 per cent. Yields fall as bond prices rise.

“The numbers support the view that there is no imminent risk of inflation getting out of control but the Fed is going to continue with normalising interest rates,” said Ian Lyngen, head of US rates strategy at BMO Capital Markets.

James Knightley, chief international economist at ING, pointed to a jobs survey from the National Federation of Independent Business this week that indicated the proportion of small businesses looking to hire workers has only been higher than it is now on three occasions in the past 45 years.

“This suggests that these 600,000 newly available workers can quickly find work if they have the right skills and that the unemployment rate will very swiftly fall back, “ he said.


Like it? Share with your friends!

841
22132 shares, 841 points

What's Your Reaction?

Fake Fake
0
Fake
Epic Epic
0
Epic
Dislike
0
Dislike
Like Like
0
Like

Comments 0

Your email address will not be published. Required fields are marked *

Booming US labour market draws new jobseekers

MainStreet Econ

Join the MSE Community

reset password

Back to
MainStreet Econ
Choose A Format
Trivia quiz
Series of questions with right and wrong answers that intends to check knowledge
Poll
Voting to make decisions or determine opinions
Story
Formatted Text with Embeds and Visuals
List
The Classic Internet Listicles
Open List
Open List
Ranked List
Ranked List
Video
Youtube, Vimeo or Vine Embeds
Image
Photo or GIF
Gif
GIF format

Send this to a friend