US records better than expected job gains

June gains beat estimates while jobless rate held at 3.6 per cent

A hiring sign at a restaurant in Schaumburg, Illinois. AP
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US employers added more jobs in June than forecast and the unemployment rate held near a five-decade low, suggesting hiring needs are so far eclipsing concerns about the economic outlook.

Non-farm payrolls rose 372,000 last month following a revised 384,000 in May, a Labour Department report showed on Friday. The unemployment rate held at 3.6 per cent and average hourly earnings rose 0.3 per cent from a month earlier.

"Today, we learnt that our private sector has recovered all of the jobs lost during the pandemic, and added jobs on top of that," President Joe Biden said.

"We have more Americans working in the private sector today than any day during Donald Trump’s presidency — more people than any time in our history."

The median estimate in a Bloomberg survey of economists was for a 265,000 increase in payrolls and for the unemployment rate to hold at 3.6 per cent.

Another solid month of employment growth further highlights the stark contrast between the resilience of the jobs market and an otherwise bleaker economic picture.

The past year’s streak of robust hiring has been good for job seekers and has led to higher pay for many employees. But it has also helped fuel the highest inflation in four decades and heightened pressure on the Federal Reserve to further slow borrowing and spending.

Many employers are still struggling to fill jobs, especially in the economy’s vast service sector, with Americans now travelling, eating out and attending public events with much greater frequency.

Mr Biden said the slower job growth is "not a bad thing, because our economy should move to stable growth for the years ahead", and again called on Congress to pass laws that would reduce utility and prescription drug costs for Americans.

The Fed may regard the June job gain as evidence that the rapid pace of hiring is feeding inflation as companies raise pay to attract workers and then increase prices to cover their higher labour costs.

The US central bank has already embarked on its fastest series of rate hikes since the 1980s, and further large increases would making borrowing much costlier for consumers and businesses and increase the risk of a recession.

For now, there are roughly two posted job openings for every unemployed worker. And the number of people seeking unemployment benefits — a proxy for layoffs and an early indicator of a downturn — remains far below historic averages, although it has ticked up recently.

— With news agencies

Updated: July 08, 2022, 2:40 PM