The US economy continues to show resilience in post-pandemic times, albeit with mixed indicators in the labor market. In June, employment growth cooled slightly after adding 209,000 jobs: a not inconsiderable number that lowered the unemployment rate from 3.7% in May to 3.6%, but which away from the 306,000 jobs created the previous month. It is also the most modest growth since the evolution began to be positive at this point, already two years ago, after the most critical phase of the pandemic.
Americans’ wages, on the other hand, rose more than expected – 0.4% compared to May – to place their annual growth at 4.4%. And that was the part that pundits and markets focused on the most.
The robust progression of labor incomes reinforces expectations of further increases in interest rates in order to contain inflation. Rates are already between 5% and 5.5%, and Federal Reserve (Fed) officials indicated last month that they would likely implement two new hikes this year, the first perhaps at the end of July .
The stock markets initially reflected, with falls, the possible disappointment of operators who trusted in less pressure towards rising rates due to wage growth. But as the day went on the mood eased in the markets, with mixed reactions and no clear direction as a result of the latest labor data.
Economists had forecast an addition of 225,000 US jobs in June – 16,000 more than were ultimately created. The US Labor Department report also showed that April and May gains were revised down by a total of 110,000 jobs from the expected numbers. The analysts’ explanation is that this spring the increase in borrowing costs, due to high rates, began to contain the desire of companies to increase their staff.
Unemployment fell last month, especially in public administration (60,000 jobs), health (41,000) and construction (23,000). Retail trade, on the contrary, recorded a decline of 11,200 jobs.
President Joe Biden, already immersed in the 2024 presidential campaign, celebrated the data with triumphalism. Since he took office, he said, the economy has added 13.2 million jobs: “More jobs have been created in two and a half years than any other president has created in four years.” to proclaim
