Daily Management Review

In June, The US Economy Added More Jobs Than Predicted


In June, The US Economy Added More Jobs Than Predicted
According to official estimates, the US economy added 372,000 jobs in June, considerably exceeding expectations. Economists predicted that the country will add between 250,000 and 295,000 jobs.
According to the US Bureau of Labor Statistics, the jobless rate has likewise maintained at historic lows. Some analysts take the robust job numbers as a warning that further US interest rate hikes are on the horizon.
"Today's job number should assuage fears of an impending recession, but it does nothing to relieve expectations of significant more Fed tightening," Seema Shah, chief global strategist at Principal Global Investors, said.
"The job market remains severely tight, suggesting still-intense wage pressures."
For the fourth month in a row, the unemployment rate remained at 3.6 per cent in June.
The cost of living in the United States, like in other countries, is growing due to rising food and energy prices. Inflation reached a 40-year high of 8.6 percent in the year to April, prompting the US Federal Reserve to raise borrowing prices in an attempt to slow the rate of price growth.
The Federal Reserve raised its main interest rate by three-quarters of a percentage point to a range of 1.5 per cent to 1.75 per cent last month, the largest increase in over 30 years.
The US economy shrunk at an annual rate of 1.6 per cent in the first three months of the year, and Fed head Jay Powell recently confessed to lawmakers that a recession is "a possibility."
The "strong jobs data contrasts with previous recent economic statements," said Richard Flynn, managing director at Charles Schwab UK.
"The US economy and the stock market have both struggled in the first half of 2022, in the face of risks that include a multi-decade high in inflation, aggressive monetary policy tightening, and the effects of Russia's invasion of Ukraine, " he said.
"However, jobs reports are lagging economic indicators that are often strong entering a downturn."