The monthly jobs report for June, released Friday, is further evidence that this indicator has become more than just a snapshot of the health of a key part of the USA economy and the outlook for monetary policy.
Along with the 213,000 jobs added in June, the jobs numbers for April and May were also revised to include 37,000 additional new hires across those months, according to data released Friday by the Bureau of Labor Statistics.
The unemployment rate rose to 4.0 percent from an 18-year low of 3.8 percent in June as more people entered the labor force in a sign of confidence in the jobs market.
Still, the healthy job gains will likely push down unemployment the rest of the year, economists say. Nonetheless, at 6.6 million, the number of unemployed Americans could again be smaller than current job openings. The breakdown of the gains however was less rosy - centered around self- employment, part-time work and the public sector.
"The key takeaway is the big jump in labor force participation", said Kevin Hassett, President Trump's top economist.
"Overall, this "not too hot, not too cold" report supports our call for four Fed rate hikes in total this year", Gregory Daco, head of United States macroeconomics at Oxford Economics in NY, said in a note. Pay hikes haven't picked up as much as anticipated in light of the historically low jobless rate, but economists expect annual gains to reach 3 percent by the end of the year.
Among industrial sub-sectors, the three standouts for jobs improvement in June were: "education and health services", +54,000; "professional and business services", +50,000; and in a long-time-coming and pleasantly-welcome development, "manufacturing", +36,000.
"As the labor market tightens we should see more businesses raisings wages, offering training, and hiring workers from all corners of the labor market", she added.
Wage growth slowed in June. But the rate rose for an encouraging reason: More people felt it was a good time to begin looking for a job, though not all of them immediately found one.
Faster wage growth would also indicate that inflation is building in the economy, which hasn't been the case even though unemployment is this low.
Department of Labor Secretary Alex Acosta said, "It rose because more people are choosing to re-enter the labor force, to come back". "While initial jobless claims rebounded during the payroll month-averaging 224k vs. 214k in May-they remain at very low levels, and continuing claims have continued to decline". So, taking this all together we have a USA economy growing at around 4% in the current quarter, that has an incredibly tight labour market with headline consumer price inflation potentially rising to 3% next week. Before joining The Washington Post, she was a senior economics reporter at CNN and a columnist and deputy editor at the Patriot-News in Harrisburg, Pa.