United States employers sharply stepped up their hiring in June, adding a robust 224,000 jobs, an indication of the economy’s durability after more than a decade of expansion.
June’s solid job growth followed a surprisingly poor showing in May, when the U.S. economy was initially reported to have added just 75,000 jobs, a result that had fueled concerns about the economy. That number was revised even lower to just 72,000. April’s number was revised down to 216,000 from 224,000.
Last month’s burst of hiring suggests that many employers have less concern about weaker global growth, President Trump’s trade wars and the waning benefits from U.S. tax cuts.
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 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 job gains in June 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.
Overall, though, employers have been adding jobs faster than new workers are flowing into the economy. That suggests that the unemployment rate will remain near its five-decade low and that the economy will keep growing, even if only modestly.
Market reaction shifted abruptly after the Bureau of Labor Statistics release. Traders moved the possibility of a 50-basis point cut to 8% from nearly 30% though 100% expectations for a quarter-point cut remained firmly in place.
President Trump has been sharply critical of the Fed and repeated his previous sentiments later in the morning.
“We don’t have a Fed who knows what they’re doing,” Trump said, adding, as he has in the past, that the economy would take off like a “rocket ship” with lower interest rates.
Stocks fell from all-time highs on Friday after the release of stronger jobs data dampened hope for easier Federal Reserve monetary policy.
The Dow Jones Industrial Average pulled back 43.88 points to 26,922.12, snapping a four-day winning streak. The S&P 500 slipped 0.2% to 2,990.41 and ended a five-day winning streak. The Nasdaq Composite fell for the first time in seven sessions, slipping 0.1% to 8,161.79. Earlier in the session, the Dow dropped as much as 232.67 points, while the S&P 500 and Nasdaq slid nearly 1% each.
Investors were betting heavily on the Fed cutting rates later this month heading into Friday’s session. CME Group’s FedWatch tool showed expectations for a rate cut in July were at 100%. Last month, the Fed said it would “act as appropriate” to maintain the current U.S. economic expansion, which is the longest in history.
The official White House Twitter account called the June numbers “another blockbuster jobs report.” President Donald Trump also celebrated the robust hiring in a pair of tweets Friday morning.
Speaking to reporters on the White House South Lawn, Trump said the job numbers were “really unexpectedly good.’’
“Our country continues to do well – really, really well,” he said. “I think we’re going to break records. If we had a Fed that would lower interest rates, we’d be like a rocket ship. … We don’t have a Fed that knows what it’s doing.”