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US labor market booms in June



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The US labor market boomed in June, creating more than expected jobs, according to the latest report from the Bureau of Labor Statistics. that 224,000 jobs were created in June, many more than the 1

60,000 economists had forecast.

The figures were headed for a recession.

The professional and business services sector was the biggest contributor to employment, adding 51,000.

Large numbers of jobs were also created in healthcare, transportation and warehousing.

Despite the strong job creation in June, wage growth was relatively modest at 0.2%, keeping the annual rate at 3.1%.

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The job data is closely watched by economists who analyze how it might affect interest rate December the US Federal Reserve

Some are betting that the Fed might lower interest rates following its next meeting which starts on 30 July

Last month the Fed indicated that interest rates might be lower due to subdued inflation and the "Fall out of bed"

"These are good numbers, but a rate cut in July is still all inevitable," said Luke Bartholomew, investment strategist at Aberdeen Standard Investments

"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 forecasts a rate cut, although not until September.

"Employment growth is still trending gradually lower but, with the stock market setting new records and trade talks back on (for now at least ), the data support our view if they are more likely to wait until September before loosening policy, "he said.

The US has posted some poor manufacturing data recently, calling for the economy to be down for a downturn.

But Doug Duncan, chief economist at Fannie Mae, said the numbers suggest "what has been seen in the manufacturing sector does not appear to be heading into a recession … the warning signs people saw in manufacturing might not be so strong".


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