The US labour market had boomed in June as it created more jobs than expected. The Bureau of Labour Statistics have released their latest report which showed that June was a good month for the labour market. The economists had forecasted that 160,000 jobs would be created but the actual number of jobs eclipsed that figure.
About 64,000 more jobs were created than the estimated figure. 224,000 jobs were created in June. There was poor jobs data in May and that data created concerns that the economy was headed towards recession but the latest figures have cleared away the concerns. The main contributor to the raised employment ration was the professional and business services sector. That sector had generated 51,000 jobs.
Healthcare, transportation and warehousing had also created a large number of jobs. The job creation may have increased in June but it had low effect on the wage growth. The wage growth remained modest at 0.2% which kept the annual rate at 3.1% Economists are keeping a close eye on the jobs data as they are analyzing how this data will affect the interest rate decisions at the US Federal Reserve.
Majority of the bets placed by analysts depict that the US Federal Reserve might lower the interest rates following its next meeting which starts on 30 July. The Feds had indicated last month that the interest rates could be lowered due to subdued inflation and the effects coming from the trade war between US and China.
Luke Bartholomew, investment strategist at Aberdeen Standard Investments said that, “These are good numbers, but a rate cut in July is still all but inevitable.” He also added, “Employment growth remains a bright spot amid a fairly mixed bag of US data and yet markets have come to expect a cut now so will fall out of bed if they don’t get one.” Andrew Hunter, senior US economist, at Capital Economics also supported that Fed will lower the rates but says that they will wait until September.