A worker carries supplies for a new house in Brandon, Mississippi, on June 19, 2019.Rogelio V. Solis / AP file
The economy gained a whopping 224,000 jobs in the month of June, beating expectations of 150,000 and continuing a generally robust hiring pace that has brought Americans off the sidelines and into the workforce at the highest rate since 1969.
The unemployment rate ticked up slightly from 3.6 percent to 3.7 percent, and average hourly wage growth edged up by 0.2 percent, versus forecasts for 0.3 percent, according to the latest monthly employment report released Friday by the Bureau of Labor Statistics.
President Donald Trump praised the jobs numbers Friday morning, telling reporters at the White House the economy “would be like a rocket ship,” if the Federal Reserve were to cut rates. “But we don’t have a Fed that knows what it’s doing,” he said.
The Dow Jones Industrial Average dipped in premarket trading, stumbled at the opening bell, and was down more than 200 points all morning. The yield on the 10-year Treasury note edged above 2 percent, an indication that traders were favoring safe haven assets.
Investors have been closely tallying a variety of economic metrics that could signal a slowdown in the economy and thereby strengthen the case for the Federal Reserve to cut its benchmark interest rate at its July 30-31 meeting, easing lending for banks and businesses.
“With a stronger-than-expected reading on hiring, the plot thickens with respect to the Fed’s decision,” Mark Hamrick, senior economic analyst at Bankrate, said. “The central bank may still attempt to mollify investors by putting a modest, so-called insurance cut in place. The array of headwinds associated with slowing global growth, trade disputes and tariffs have not gone away.”
Last month’s BLS report revealed just 75,000 jobs were added to the economy in May, far below expectations of 165,000. That number was revised Friday to an even lower 72,000. In addition, April’s figure was revised down to 216,000 job gains, versus 224,000.
Markets notched record gains after ADP’s data was released Wednesday, with all three indices closing at new highs.
Trump has repeatedly touted the strong economy as one of the successes of his presidency and believes a rate cut would drive up the value of the stock market, calling the Fed “loco” for not following that strategy.
Former Fed Chair Janet Yellen hiked rates three times in 2017; Trump replaced her at the end of her four-year term with Republican hedge fund investor and then Fed governor Jerome Powell — who has gone on to raise rates four times since he took the helm in February last year.
While continually stressing the independence of the Fed from political pressure, Powell signaled last month that the Fed would likely cut rates this year, noting that the Federal Open Market Committee, which votes on any adjustments, would “act as appropriate to sustain the expansion” amid “greater uncertainty” on trade and “renewed concerns about the strength of the global economy.”
Source: NBC News