US job growth beats expectations in June, unemployment rate dips to 4.1%
Nonfarm payrolls increased by 147,000 jobs last month after an upwardly revised 144,000 advance in May, the Labor Department's Bureau of Labor Statistics said in its closely watched employment report on Thursday (Jul 3).
Economists polled by Reuters had forecast payrolls rising 110,000 following a previously reported 139,000 gain in May. Estimates ranged from an increase of 50,000 to 160,000 jobs.
The report was published a day early because of the Independence Day holiday on Friday. Despite the bigger-than-expected rise in payrolls, job growth is slowing, mostly reflecting tepid hiring. Layoffs remain fairly low, with employers generally hoarding workers following difficulties finding labour during and after the Covid-19 pandemic.
Economists say President Donald Trump's focus on what they call anti-growth policies, including sweeping tariffs on imported goods, mass deportations of migrants and sharp government spending cuts, has changed the public's perceptions of the economy.
Business and consumer sentiment surged in the wake of Trump's victory in the presidential election last November in anticipation of tax cuts and a less stringent regulatory environment before slumping about two months later.
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The unemployment fell from 4.2 per cent in May. Economists had expected the jobless rate to tick up to 4.3 per cent.
Indicators, including the number of people filing for state jobless benefits and receiving unemployment checks, have pointed to labour market fatigue after a strong performance that shielded the economy from recession as the US central bank aggressively tightened monetary policy to combat high inflation.
Most economists expect the jobless rate will rise through the second half of this year, and potentially encourage the Fed to resume its monetary policy easing cycle in September.
The Fed last month left its benchmark overnight interest rate in the 4.25-to-4.50 per cent range, where it has been since December. Fed chair Jerome Powell on Tuesday reiterated the central bank's plans to 'wait and learn more' about the impact of tariffs on inflation before lowering rates again. REUTERS
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