The United States economy added 206,000 jobs in June economy


The U.S. economy added 206,000 nonfarm payroll jobs in June. Data released by the Bureau of Labor Statistics this Friday, Depends on labor department. Despite rising interest rates, the world’s leading economy’s labor market has maintained its buoyancy in recent years. Analysts had expected about 194,000 jobs to be created, so the number was slightly higher than forecasts. However, the unemployment rate rose from 4.0% to 4.1%, a tenth higher than expected.

Economists have been examining the differences between the two main surveys that measure the temperature of the U.S. labor market for some time. Surveys of employers show formal job creation rather than household jobs, which are used to calculate the unemployment rate. The explanation for the discrepancy is not entirely clear, but experts point to problems with both models. On the one hand, the employer survey underestimates companies that close and disappear, so successful ones are overrepresented. For its part, the household census may leave out job creation among immigrant populations, who are more likely to escape the analysis of statistical power.

“Sometimes you can’t fix the differences. You have to look at it and try to understand it,” Federal Reserve Chairman Jerome Powell said after the last monetary policy meeting last month. However, the overall picture is of a strong and gradually cooling labor market,” he added.

The U.S. labor market has shown tremendous resistance to the Federal Reserve’s tightening of monetary policy, its most aggressive since the 1980s, when the central bank has been fighting four decades of high inflation. Powell believes the labor market has found a better balance between job opportunities and unemployed workers. A very tight market, in which labor is not easy to find, pushes up wages, with the risk of creating a wage-price spiral where inflation can take root.

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“Strong job creation over the past two years has been accompanied by an increase in the labor supply, an increase in the activity rate among 25- to 54-year-olds, and maintaining a strong immigration rate,” Powell said. weeks ago. “Nominal wage growth has slowed over the past year and the gap between jobs and the number of workers has narrowed. “Overall, a broad range of indicators suggest that labor market conditions are back to where they were before the pandemic: relatively tight, but not overheated,” he added.

Federal Reserve members expect the unemployment rate to remain at 4.0% through the end of the year and rise to 4.2% in 2025.

Investors are closely monitoring employment and price data to anticipate the next move in interest rates. The market expects rates to hit a 23-year high at a meeting later this month, but the first cut of 0.25 points is more likely to come at the last meeting of the summer on September 17 and 18. According to the Fedwatch tool, from the CME Group.

Strong job creation is one of the assets of US President Joe Biden, facing re-election. Biden will hold a rally this Friday in the industrial state of Wisconsin, where he will tout the strength of the labor market. The president is trying to recover from the terrible image he gave in last week’s disastrous televised debate against Donald Trump in Atlanta. Citizens are more concerned with their age, physical fitness and mental acuity than their economic heritage. Biden has dropped out of the re-election race in the face of political, media and financial pressure, but for now he’s determined to fight.

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