Please ensure Javascript is enabled for purposes of website accessibility
US Adds 224,000 Jobs, Making Fed Rate Cut Less Certain
gvw_ap_news
By Associated Press
Published 6 years ago on
July 5, 2019

Share

The unemployment rate ticked up to 3.7% in June from 3.6% for the previous two months, reflecting an influx of people seeking jobs who were initially counted as unemployed. Average hourly wages rose 3.1% from a year ago.
The strength of the jobs report the government issued Friday could complicate a decision for the Federal Reserve late this month on whether to cut interest rates to help support the economy. Most investors have anticipated a rate cut in July and perhaps one or two additional Fed cuts later in the year. That scenario may be less likely now.
Stocks sold off early Friday before paring their losses later. The Dow Jones Industrial Average closed down a modest 43 points. But the yield on the 10-year U.S. Treasury note climbed to 2.04% from just under 2% before the jobs report was released, reflecting a view that the Fed might now be less inclined to cut rates multiple times.

Jobs Back on the Rebound

June’s solid job growth followed a tepid gain of 72,000 jobs in May, a result that had fueled concerns about the economy’s health. But with June’s pace of hiring, employers have now added, on average, a solid 171,000 jobs for the past three months. Last month’s burst of hiring suggests that many employers have shrugged off concerns about weaker growth, President Donald Trump’s trade wars and the waning benefits from U.S. tax cuts.
“Although there are drags on the economy in 2019, the expansion should continue through this year,” said Gus Faucher, chief economist at PNC Financial Services. “The doom and gloom was overblown.”
The unemployment rate ticked up to 3.7% in June from 3.6% for the previous two months, reflecting an influx of people seeking jobs who were initially counted as unemployed. Average hourly wages rose 3.1% from a year ago.

“If we had a Fed that would lower interest rates, we’d be like a rocket ship.” — President Donald Trump
Trump responded to Friday’s jobs report by tweeting, “JOBS, JOBS, JOBS!” But the strong hiring gains have lessened the case, at least for now, for the Fed to slash rates as Trump has repeatedly and aggressively pressed the central bank to do.
“If we had a Fed that would lower interest rates, we’d be like a rocket ship,” the president asserted to reporters in an appearance Friday. “But we’re paying a lot of interest, and it’s unnecessary. But we don’t have a Fed that knows what they’re doing.”

Fed Raised Interest Rates Four Times in 2018

Last year, Fed officials raised rates four times, in part to stave off the risk of high inflation and in part to try to ensure that they would have room to cut rates if the economy stumbled.
On Friday, the Fed reiterated that it would act as necessary sustain the economic expansion, while noting that most Fed officials have lowered their expectations for the course of rates. The Fed’s statement came in its semiannual report on monetary policy.
In Friday’s jobs report for June, the hiring gains were broad. Construction companies added 21,000 workers after having increased their payrolls by only 5,000 in May. Manufacturers hired 17,000, up from just 3,000 in May. Health care and social assistance added 50,500 jobs. Hiring by transportation and warehousing companies increased 23,900.

Local Governments Add Jobs

The government sector was a major source of hiring, adding 33,000 jobs in June. Nearly all those gains were at the local level.
For Todd Leff, CEO of Hand & Stone Massage and Facial Spa, the resilience of the U.S. job market has provided both an opportunity and a challenge. With more Americans earning steady paychecks, demand for massages and facials has increased, and the company plans to add 60 locations this year and roughly 1,800 jobs. But the low unemployment rate has also made it hard to find and retain workers.
“We could hire 1,000 more employees today — if they were available,” said Leff, whose company has about 430 locations and is based in Trevose, Pennsylvania.
Investors have been turning their attention to the Fed, which has expressed concern about threats to the economy, especially the uncertainties from Trump’s trade wars, and about inflation remaining persistently below its 2% target level. A Fed rate cut, whenever it happens, would be its first in more than a decade.

Fed Chief Will Testify Next Week

Joshua Shapiro, chief U.S. economist for the consultancy MFR, said the likelihood of a Fed rate cut late this month is now slightly lower, though he still estimates that the federal funds rate — what banks charge each other — will be sharply lower by the end of next year.
Ryan Wang, U.S. economist at HSBC Bank, suggested that the solid jobs report might create a communications challenge for Fed Chairman Jerome Powell when he testifies Wednesday and Thursday to congressional committees.
The financial markets still foresee a rate cut of 25 points this month, Wang said, adding, “It will be important to see if Chair Powell lays out on a strong case for near-term monetary easing in his testimony next week.”
The sluggish pace of hiring in May had signaled that employers might have grown more cautious because of global economic weakness and, perhaps, some difficulty in finding enough qualified workers at the wages that companies are willing to pay.
The pace of the overall economy is widely thought to be slowing from annual growth that neared a healthy 3% last year. Consumer spending has solidified. Home sales are rebounding. But America’s manufacturing sector is weakening along with construction spending. Growth in the services sector, which includes such varied industries as restaurants, finance and recreation, slowed in June.
 

DON'T MISS

What Are Fresno Real Estate Experts Predicting for 2025 and Beyond?

DON'T MISS

First California EV Mandates Hit Automakers This Year. Most Are Not Even Close

DON'T MISS

Under Trump, US Economy Shrinks for 1st Time in Three Years

DON'T MISS

Fresno Authorities Seek Public’s Help to Locate Family of Deceased Man

DON'T MISS

CEO Pay Rose Nearly 10% in 2024 as Stock Prices and Profits Soared

DON'T MISS

Valley Crime Stoppers’ Most Wanted Person of the Day: Alejandro Aureliano Godinez

DON'T MISS

Israel Authorizes More Settlements in the Occupied West Bank. Strikes on Gaza Kill 13

DON'T MISS

Crypto Crime Spills Over From Behind the Screen to Real-Life Violence

DON'T MISS

Trump Administration Revokes Parole of Mexican Girl Receiving Lifesaving Care in US

DON'T MISS

California Avocado Growers Say Mexican Imports Have Helped Their Sales

DON'T MISS

Business Insider Cuts 21% of Workforce, Memo Shows

DON'T MISS

49ers Make a Switch at Punter, Signing Thomas Morstead and Cutting Mitch Wishnowsky

UP NEXT

Harvard Agrees to Relinquish Early Photos of Slaves, Ending a Long Legal Battle

UP NEXT

Silence on E. Coli Outbreak Highlights How Trump Team’s Changes Undermine Food Safety

UP NEXT

Trump Pardons Tax Cheat After Mother Attends $1 Million Dinner

UP NEXT

NPR Sues Trump Administration Over Executive Order to Cut Funding

UP NEXT

Justice Department Reaches Deal to Allow Boeing to Avoid Prosecution Over 737 Max Crashes

UP NEXT

Low-Income Compton Students Get $225M State-of-the-Art High School Campus

UP NEXT

Everyone Now Has an Opinion on Jake Tapper

UP NEXT

Braves Star Ronald Acuña Jr. to Return Friday From Left Knee Injury

UP NEXT

Dave Shapiro, Groundbreaking Music Executive, Dies in San Diego Plane Crash at 42

UP NEXT

CA State Senator Cited for Suspicion of Impaired Driving, Says She Wasn’t Intoxicated

Valley Crime Stoppers’ Most Wanted Person of the Day: Alejandro Aureliano Godinez

2 hours ago

Israel Authorizes More Settlements in the Occupied West Bank. Strikes on Gaza Kill 13

2 hours ago

Crypto Crime Spills Over From Behind the Screen to Real-Life Violence

2 hours ago

Trump Administration Revokes Parole of Mexican Girl Receiving Lifesaving Care in US

2 hours ago

California Avocado Growers Say Mexican Imports Have Helped Their Sales

2 hours ago

Business Insider Cuts 21% of Workforce, Memo Shows

2 hours ago

49ers Make a Switch at Punter, Signing Thomas Morstead and Cutting Mitch Wishnowsky

2 hours ago

McVay Admits Rams Considering Reunion With Jalen Ramsey

2 hours ago

Yankees Have a Busload of Momentum Heading Into World Series Rematch Against Dodgers

2 hours ago

Martínez Hits a 3-Run Homer in the Eighth Inning as Guardians Rally for Win Over Dodgers

2 hours ago

Under Trump, US Economy Shrinks for 1st Time in Three Years

President Donald Trump has now overseen the first shrinking of the U.S. economy in three years. The gross domestic product contracted by 0.2...

31 minutes ago

Trump Takes Questions about Pope Image
31 minutes ago

Under Trump, US Economy Shrinks for 1st Time in Three Years

The Fresno County Coroner’s Office is asking for the public’s help to locate the family of Navjit Singh, 31, who died of natural causes on May 17. (Fresno County SO)
1 hour ago

Fresno Authorities Seek Public’s Help to Locate Family of Deceased Man

1 hour ago

CEO Pay Rose Nearly 10% in 2024 as Stock Prices and Profits Soared

Alejandro Aureliano Godinez is Valley Crime Stoppers' Most Wanted Person of the Day for May 29, 2025. (Valley Crimes Stoppers)
2 hours ago

Valley Crime Stoppers’ Most Wanted Person of the Day: Alejandro Aureliano Godinez

2 hours ago

Israel Authorizes More Settlements in the Occupied West Bank. Strikes on Gaza Kill 13

2 hours ago

Crypto Crime Spills Over From Behind the Screen to Real-Life Violence

2 hours ago

Trump Administration Revokes Parole of Mexican Girl Receiving Lifesaving Care in US

2 hours ago

California Avocado Growers Say Mexican Imports Have Helped Their Sales

Help continue the work that gets you the news that matters most.

Search

Send this to a friend