U.S. adds 213,000 jobs; jobless rate up to four per cent

WASHINGTON — U.S. employers kept up a brisk hiring pace in June by adding 213,000 jobs, a sign of confidence in the economy despite a potentially punishing trade war start with China.

The job growth wasn’t enough to keep the unemployment rate from rising from 3.8 per cent to four per cent, the government said Friday. But the rate rose for an encouraging reason: More people felt it was a good time to begin looking for a job, but not all of them found one immediately.

The growing optimism that people can find work suggested that the nine-year-old U.S. economic expansion — the secondlongest on record — has the momentum to keep chugging along. Yet its path ahead is uncertain. Just hours before the monthly jobs report was released, the Trump administration imposed taxes on $34 billion in Chinese imports, and Beijing hit back with tariffs on the same amount of U.S. goods.

“The tariffs jumble things about what we should expect to see in the next few months,” said Cathy Barrera, chief economist at ZipRecruiter, the online jobs marketplace. Some companies will respond to the tariffs by putting their hiring plans on hold until the trade picture clears.

Major U.S. stock indexes were mostly higher Friday after the jobs report was issued, keeping the market on track for a weekly gain after two weeks of losses.

The June jobs data showed an economy that may be on the cusp of producing stronger pay growth, something that could be disrupted if additional tariffs are imposed. Trump has suggested that more than $500 billion worth of Chinese imports could be taxed in his drive to force Beijing to reform its trade policies, which he insists have unfairly victimized the United States.

Average hourly pay rose just 2.7 per cent in June from 12 months earlier. That relatively modest increase means that, after adjusting for inflation, overall wages remain nearly flat. But the average was skewed downward in June because the job seekers were mainly those with only a high school education or less, who are generally paid lower wages, Barrera noted.

The ranks of jobless people seeking work jumped by 499,000 in June, which caused the unemployment rate to rise from its previous 18 year-low. With 93 straight months of job growth — a record — many employers have said they’re feeling pressure to raise wages. But significant pay gains have yet to emerge in data.