US job growth strong; unemployment rate rises to 4 per cent

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BNN Bloomberg Commentator looks under the hood of the latest Canadian jobs report and explains how the underlying data reveals a less rosy picture for the economy than the headline numbers.

Nonfarm payrolls rose by 213,000 jobs last month, the Labor Department said on Friday.

Today's figures also showed that the United States unemployment rate rose to 4% from an 18-year low of 3.8% in May as more people entered the labour force in the sign of confidence in the jobs market.

One area that remains sluggish is wage growth, which grew 2.7% when compared with the same period a year ago. That kept the annual increase in average hourly earnings at 2.7%.

Workers who haven't gone to college accounted for all of this month's net increase in the labor force and employment. The unemployment rate nevertheless saw a small uptick.

In May, Edmonton's chief economist, John Rose, said the city's unemployment rate was dropping largely due to gains in construction, manufacturing and professional services. "Consumer perceptions of the labor market also remain near multi-decade highs". It's the 93rd consecutive month of job gains, an impressively long and strong stretch of growth.

Time difference gives China head start on tariff war with U.S.
Reports indicate that Beijing's tariffs on an equivalent price of US imports are poised to kick the same day. He emphasised that United States tariffs on Chinese exports will hurt both Chinese and foreign firms.

All those unemployed workers came from outside the labor force. But retailers cut 21,600 jobs last month, after boosting payrolls by 25,100 in May.

Though economic growth appears to be solid, the gains have been spread unevenly.

Savings from the tax cuts enabled companies in the Standard & Poor's 500 stock index to buy back a record number of shares in the first three months of 2018.

However, the labour participation rate suggests the city had the lowest rate of labour participation or people who are employed, in the country. On Thursday, Trump floated the prospect of imposing tariffs on more than $500 billion in Chinese imports.

The economy also faces a substantial threat from the trade tension with China and from other trade disputes with US allies, including Canada and Europe.

Following the report, US stock turned positive after having been in red figures ahead of the report.

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