Jobs growth declined in June
The jobs market may be cooling off slightly.
Per a report on POLITICO, job growth decelerated in June, the government reported Friday, as employers struggled to find qualified workers to fill an abundance of job openings.
The Labor Department reported 213,000 new jobs in June, down from 244,000 in May. The unemployment rate ticked up to 4 percent after falling to 3.8 percent in May.
The tight labor market continued to produce bafflingly weak wage growth, with average hourly earnings up 2.7 percent over the previous year, unchanged from May.
Although government data show there are roughly enough jobs for every person seeking one, experts say businesses are struggling to find qualified applicants.
“That’s the number one issue,” said Dan North, chief economist for Euler Hermes North America. “We’re desperate for labor.”
The labor force participation rate — the share of people actively looking for a job — remained near 63 percent in June, close to its lowest level since the 1970s.
The report came as President Donald Trump was preparing to impose tariffs on $34 billion of Chinese goods, edging toward a full-blown trade war. Business groups worry that Trump’s escalating trade war will pinch GDP growth, which the Commerce Department last week calculated at 2 percent for the first quarter, and boost the unemployment rate.
It’s a worry shared by Federal Reserve policymakers, who in a meeting last month said they were “concerned that such uncertainty and risks eventually could have negative effects,” according to minutes released Thursday.
“It’s just a free-floating anxiety about what the hell is going to happen,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
Economists had been expecting job growth to slow down after months of strong gains as the economy neared full employment, and although it did, the June numbers still exceeded economists’ expectations. Job growth may continue to decelerate before November midterms elections, but many economists expect wage growth to become more brisk before the end of 2018.
“Wage growth is slowly but steadily accelerating,” said Mark Zandi, chief economist at Moody’s Analytics.