The US economy continues to exhibit its resilience in post-pandemic times, albeit with mixed indicators in the labor market. In June, employment growth cooled slightly, adding 209,000 jobs: a not insignificant figure that lowered the unemployment rate from 3.7% in May to 3.6%, but which is far from the 306,000 jobs created in the month former. It is also the most modest growth since the evolution began to be positive at this point, two years ago, after the most critical phase of the pandemic.
Wages for Americans, on the other hand, rose more than expected –0.4% compared to May– to place their annual growth at 4.4%. And this was the part that the experts and the markets paid most attention to.
The robust growth in labor income reinforces expectations of new interest rate hikes in order to contain inflation. Rates are already in the range of 5% to 5.5% and those responsible for the Federal Reserve (Fed) already anticipated last month that they would probably apply two new increases this year, the first perhaps at the end of July.
The stock markets reflected from the outset, with falls, the possible disappointment of the operators who trusted in less pressure towards the rise in rates through wage growth. But as the day wore on, the climate calmed down in the markets, with mixed reactions and without a clear direction as a result of the latest labor data.
Economists had predicted an addition of 225,000 jobs in the US in June: 16,000 more than those finally created. And the US Department of Labor report also showed that increases in April and May were revised down by a total of 110,000 jobs from expected numbers. The analysts’ explanation is that this past spring the higher borrowing costs, due to the high interest rates, began to curb the appetite of companies to increase their workforces.
Unemployment fell last month, especially in public administrations (60,000 jobs), Health (41,000) and construction (23,000). On the other hand, retail trade recorded a decline of 11,200 jobs.
President Joe Biden, already involved in the 2024 presidential campaign, celebrated the data triumphantly. Since he took office, he said, the economy has added 13.2 million jobs: “That’s more jobs added in two and a half years than any other president has created in four years,” he proclaimed.
