While U.S. employment rose significantly in June, nearly three-quarters of the payroll gain came from hiring in the government and healthcare sectors, and the unemployment rate reached a two-and-a-half-year high of 4.1%. These signs of a weakening labour market keep the Federal Reserve on track to begin reducing interest rates shortly.<\/p>\n
The closely followed employment report from the Labour Department on Friday revealed that, in April and May, the economy added 111,000 fewer jobs than initially projected, indicating a slowdown in the payroll growth trend.<\/p>\n
According to Scott Anderson, chief U.S. economist at BMO Capital Markets, “We now have concrete evidence of labour market cooling with a somewhat alarming rise in the unemployment rate in recent months that should give policymakers’more confidence’ that consumer inflation will soon return to the 2.0% target on a sustained basis.”<\/p>\n
According to the Labor Department’s Bureau of Labor Statistics, government hiring contributed to a 206,000 increase in nonfarm payrolls last month. According to Reuters polled economists, payrolls increased by 190,000 last month, while the unemployment rate remained at 4.0%.<\/p>\n
In this year’s first half, job growth has averaged roughly 222,000 per month. According to analysts, the working-age population is expected to grow by 180,000\u2013200,000 jobs per month, accounting for the recent spike in immigration.<\/p>\n