Sunday, July 14, 2024

U.S Unemployment Rate Climbs 4.1% in June- Report

U.S. unemployment rate hit a 2-1/2-year high of 4.1% in June 2024, with government and healthcare services hiring making up about three-quarters of the payrolls gain.

According to reports, this points to a slackening labour market that keeps the Federal Reserve on course to start cutting interest rates.

The Labour Department’s employment report on Friday also showed the economy created 111,000 fewer jobs in April and May than previously estimated, suggesting the trend in payrolls growth was slowing.

Annual wages increased at the slowest pace in three years amid an expanding labor pool, adding to the flashing warning signals in the jobs market.

About 277,000 people joined the labour force, accounting for the increase in the jobless rate from 4.0% in May to the highest level since November 2021.

Nonfarm payrolls increased by 206,000 jobs last month, lifted by government hiring, the Labour Department’s Bureau of Labour Statistics said.

The Quarterly Census of Employment and Wages (QCEW), has suggested a much slower pace of job growth through the fourth quarter of 2023 than that of the payrolls data.

UK Unemployment Rises as Wage Growth Hits Record High

The QCEW data is derived from reports by employers to the state unemployment insurance (UI) programs. While economists expect employment to be revised down when the BLS in August publishes its payrolls benchmark estimate for the 12 months through March of this year, they argued that the QCEW data does not include unauthorized immigrants, a group that they believe contributed to strong job growth last year.

Though hiring in June continued to be driven by acyclical sectors like healthcare and state and local governments, the share of industries reporting job growth jumped to 59.6% from 56.4% in May.

Government employment surged by 70,000 jobs, the most since December, boosted by local government, excluding education and state government.

Private payrolls increased by 136,000, with the healthcare and social assistance sector adding 82,400 positions.

Construction payrolls rose by 27,000. But the retail sector shed jobs, as did manufacturing. Professional and business services employment declined by 17,000 jobs, with temporary help jobs dropping by about 49,000, the most since April 2020. That likely portends slower payrolls gains ahead.

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