Job gains show boom has room
The boom times might not be done just yet.
American employers sharply stepped up hiring in June, adding a robust 224,000 jobs after an underwhelming May gain of just 72,000 jobs.
The impressive numbers show the economy may have room to grow after more than a decade of expansion.
“Although there are drags on the economy in 2019, the expansion should continue through this year,” said Gus Faucher, chief economist at PNC Financial Services. “The doom and gloom was overblown.”
President Trump crowed at the jobs report, which he says reflects confidence in his stewardship of the economy.
“JOBS, JOBS, JOBS!” Trump tweeted.
Unemployment rose to 3.7%, but that number is still historically low.
The job market has been growing without interruption since end of the Great Recession 10 years ago.
Ironically, the strong jobs report could complicate a decision by the Federal Reserve late this month on whether to cut interest rates to help support the economy. Most investors have anticipated a rate cut in July and perhaps one or two additional Fed cuts later in the year. That scenario may be somewhat less likely especially if the better numbers continue in coming months.
Trump has repeatedly urged the Fed to lower rates to keep the economy running on all cylinders — and he doubled down on that call Friday.
“If we had a Fed that would lower interest rates, we’d be like a rocket ship,” the president asserted to reporters in an appearance Friday. “But we’re paying a lot of interest, and it’s unnecessary. But we don’t have a Fed that knows what they’re doing.”
Stocks were little changed Friday as investors clashed over whether June’s solid job growth followed a tepid gain of 72,000 jobs in May, a result that fueled concerns about the economy’s health. But with June’s pace of hiring, employers have now added, on average, a solid 171,000 jobs over each of the past three months. Last month’s burst of hiring suggests that many employers have shrugged off concerns about weaker growth, Trump’s trade wars and the waning benefits from U.S. tax cuts.
Last year, Fed officials raised rates four times, in part to stave off the risk of high inflation and in part to try to ensure that they would have room to cut rates if the economy stumbled.
On Friday, the Fed reiterated that it would “act as appropriate to sustain the expansion.”