U.S. labor market: Few fireworks in robust June jobs report
WEEKLY MARKET COMMENTARY |
Attempts by businesses to dig deeper into the labor market to recruit full-time workers was on display during the month of June as an additional 601,000 individuals entered the labor force. This sent the unemployment rate up to 4 percent (4.048 percent) and the labor force participation rate higher (62.9 percent from 62.7 percent). From a purely economics point of view, these are precisely the conditions where one wants to see an increase in the unemployment rate. With 213,000 new jobs added, this is clearly a robust labor market. Moreover, given the increase in overtime and aggregate hours worked, it is apparent that there is a strong foundation for positive consumer sentiment and a strong spending environment.
From a monetary policy standpoint, there is nothing in the June labor report that indicates the Federal Reserve will alter the course and businesses and investors should prepare for a 25 basis point hike in September and an additional 25 basis point increase in December.
