ADDS MBA CHIEF ECONOMIST'S COMMENTS
By Ovunc Kutlu
ISTANBUL (AA) - The US economy added 206,000 jobs in June, more than estimates, according to Labor Department figures released Friday.
The expectation for non-farm payrolls was to show a gain of 191,000 last month.
Job additions for May, on the other hand, were revised downward by 54,000, from 272,000 to 218,000.
The unemployment rate, meanwhile, rose to 4.1% in June from 4% in May.
The market estimate for that figure was to remain unchanged at 4%.
The number of unemployed people climbed slightly to 6.8 million in June, from 6.6 million in May, while the labor force participation rate slightly rose to 62.6% from 62.5% during that period.
The employment-population ratio, on the other hand, held steady at 60.1% during that period.
In June, the number of people not in the labor force who currently want a job declined by 483,000 to 5.2 million, the Labor Department said in a statement.
"These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job," it added.
- Record job growth
Last month, most employment was seen in government employment, with a gain of 70,000, followed by health care with 49,000 and social assistance with 34,000.
In June, average hourly earnings for all employees on private non-farm payrolls gained 0.3% to $35 per hour, compared to May.
That figure showed an annual increase of 3.9%, compared to the same month of 2023.
President Joe Biden later said in a statement that the US has "more work to do," but wages are growing faster than prices and more Americans are joining the workforce.
He said the US has reached its highest share of working-age Americans in the workforce in more than 20 years, and that a record 15.7 million jobs have been created during his administration.
"Too many Americans are still feeling squeezed by the cost of the living," he said. "I’m fighting to lower costs by taking on corporate price gouging, capping the cost of insulin and prescription drugs, and calling on Congress to lower rent by building 2 million new homes."
Biden argued that congressional Republicans side with billionaires and will supercharge inflation, claiming that they would impose high consumer tariffs, give tax cuts to the wealthy and repeal the Affordable Care Act.
- ‘Time for Fed to cut interest rates’
Mark Zandi, a chief economist at Moody’s Analytics, wrote on X that it is time for the Federal Reserve to cut interest rates.
"That’s the message in today’s jobs report for June. Unemployment while still low is steadily notching higher. Job and wage growth while still strong are steadily moderating. The Fed has met its full employment mandate," he said. "This comes after last week’s stellar report on inflation which indicates the Fed’s inflation target is in clear view. Harmonized inflation is firmly below target. Hard to justify a restrictive 5.5% federal funds rate."
The Fed's preferred inflation indicator, the core personal consumption expenditures (PCE) price index, rose 2.6% in May, down from the 2.8% year-on-year gain in April.
The core PCE price index climbed 0.1% in May, slowing from a 0.3% month-on-month increase in April.
- ‘Weakening job market’
"Similar to May, the headline gain in nonfarm payroll employment data in June does not tell the entire story," Mike Fratantoni, Mortgage Bankers Association's (MBA) chief economist, said in a statement.
He noted that recent data indicate a slowing job market.
"While the headline gain showed an increase of 206,000 jobs, more than one-third of that was a gain in government employment, largely a function of increases in state and local jobs," he added.
Fratantoni said wage gains slowed to 3.9% on a 12-month basis, and temporary hires dropped by 49,000, which signals that business demand for labor is decreasing.
"Historically speaking, this is still a tight job market. However, relative to more recent data, the job market is weakening," he said.
"Inflation data showing more reductions for the next couple of months will be the most important evidence that the Federal Reserve needs to cut rates in September. The current job market data points in that direction once you read below the headline," he added.