U.S. employers added 224,000 workers in June, buoying a choppy labor market whose growth remains significantly slower than in 2018.
Payrolls in the country have expanded by an average 172,000 positions a month in 2019, according to the U.S. Labor Department, down from 223,000 the year before. The agency also reduced preliminary numbers from the previous two months, slicing May’s gains to 72,000 and April’s to 216,000, for a total decrease of 11,000.
The data from the Labor Department offers a gauge of the effects of President Trump’s global trade disputes, covering a period after the White House had more than doubled some tariffs on Chinese goods and was threatening double-digit duties on all remaining imports from the world’s second-largest economy.
Economists and lawmakers have long cautioned that such moves risk undercutting U.S. growth buoyed by GOP-led tax cuts in late 2017, and the Federal Reserve has said it’s monitoring the fallout while considering whether to lower interest rates.
While the unemployment rate ticked up 10 basis points to 3.7% in June, it remained at the lowest level since 1969, and payroll growth was 37% higher than the average estimate of 163,500 from economists surveyed by FactSet.
The gains represent a sharp turnaround from tepid expansion in May, though overall performance reflects reluctance to hire new employees after the Trump administration more than doubled tariffs on $250 billion of Chinese imports and threatened duties on the $300 billion-plus in remaining goods.
The duties have pushed up the price of supplies for U.S. manufacturers, while eating into their profits and raising costs for customers.
Fallout from the White House’s trade disputes, which extend from Beijing to Europe and Japan, have boosted speculation in futures markets that the Fed will provide the interest-rate cut that Trump has long advocated.
While the central bank’s monetary policy committee will probably prioritize business confidence and investment in deciding whether to cut rates in July, the labor market will affect the odds, said Robert Martin, an economist with the Swiss lender UBS.
Growth of 185,000 jobs in June, he predicted earlier this week, would lower the chances of a July rate cut.
“It’s one of the more critically important monthly readings we’ve had in some time,” Mark Hamrick, senior economic analyst for Bankrate.com, told the Washington Examiner.
Job growth sagged below 100,000 — the number needed to keep pace with population growth — in two of the first five months of the year, he noted, and average gains this year are “consistent with the thesis that the strongest job growth appears to be behind us.”
