The rise in the USA unemployment rate isn’t bad news

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Among the strongest industries for job growth during the month was manufacturing, which extended a surge in hiring by adding 36,000 jobs even with tariffs in place.

The U.S. economy posted another month of solid employment growth in June and the labor force swelled as workers came off the sidelines to look for jobs.

Wage growth remained sluggish, however, and was effectively erased by inflation: average hourly earnings rose just 0.2 percent to $26.98, putting wages up 2.7 percent over the same month a year ago, the same as the 2.7 percent rise in the Consumer Price Index.

The economy added 37,000 more jobs in April and May than previously reported.

The bottom line is that the buoyancy in June's US labor market statistics will reaffirm the Federal Reserve's view that the economy is doing super-well at present and that further interest rate hikes will be justified. The majority of the increase is in support activities for mining.

The overall picture is again one of a strengthening labor market, but one that is still not tight enough to produce substantial wage growth.

The report showed that Canada's trade surplus with the USA narrowed to $3.3 billion in May, from $3.7 billion April, as more imports headed north across the border and south-bound exports decreased.

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According to the BLS report , titled "The Employment Situation-June 2018", total nonfarm employment increased by 213,000 in June. Minutes of the Fed's June 12-13 policy meeting published on Thursday offered an upbeat assessment of the labor market.

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The growing optimism that people can find work suggested that the 9-year old USA economic expansion - the second-longest on record - has the momentum to keep chugging along.

Wage growth is barely keeping ahead of inflation, which is firming up as the economy strengthens. The retail industry's woes were also reflected in employment, as vendors cut 21,600 positions, the biggest drop since December.

What about tariffs? On Friday, the USA formally imposed an additional $34 million in tariffs on China. It had declined for three straight months.

After revisions, job gains averaged 211,000 over the past three months, as the job market was approaching full employment. The Fed's preferred inflation measure hit the central bank's 2 percent target in May for the first time in six years.

Washington is also engaged in fights with other major trade partners, including Canada, Mexico and the European Union after President Donald Trump imposed tariffs on steel and aluminum imports. This suggests renewed economic optimism among less-skilled or less-educated workers. The category, which includes computer systems designers, engineers, consultants and administrative staff, added 50,000 jobs during a robust month of hiring.

Yet the monthly figures landed the same day as President Donald Trump intensified a global trade war with United States levies on US$34 billion (RM137.36 billion) of Chinese goods, spurring retaliatory tariffs. Trump has spoken about slapping tariffs on imported cars, trucks and auto parts, which General Motors has warned could hurt the USA auto industry and drive up vehicle prices.

Mara Fortin, who owns seven Nothing Bundt Cake stores in the San Diego area, said she raised pay last month to $13 an hour from $11.50. There were gains in professional and business services employment as well as leisure and hospitality.

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