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July 08, 2016 at 10:10 AM
Jobs increased by 287,000 in June, the Bureau of Labor statistics announced on Friday, and unemployment increased slightly from 4.7% in May to 4.9%.
BLS noted that the increase in unemployment offset losses in May and brought it back in line with levels seen in August 2015 through April.
The bulk of the increase in jobs came in the leisure and hospitality, and health care and social assistance sectors, which added 59,000 and 58,000 jobs respectively. Information added 44,000 jobs, while financial activities added 16,000.
Jim O’Sullivan, chief U.S. economist for High Frequency Economics, noted that the “strong rebound” in payrolls is “consistent with a still fairly strong trend.” HFE had predicted an increase of 210,000 and 4.7% unemployment.
“We believe the trend remains more than strong enough to keep the unemployment rate declining over time, consistent with additional upward pressure on wage gains,” O’Sullivan wrote in a market commentary. “Wage gains have already accelerated a little, with this month’s low month-over-month reading likely due to seasonal adjustment issues — June 2015 was even weaker.”
O’Sullivan added that if labor market strength is sustained, the Fed will likely begin tightening monetary policy “before too long.” He predicted the Fed will “almost certainly remain on hold at the July 26-27 meeting.”
However, Rick Rieder, chief investment officer of global fixed income at BlackRock, doesn’t believe that growth will be sustained. He wrote in a commentary that although the report “provided a decent upward surprise,” the pace of jobs growth over the last few years is “unlikely to be sustained […] as reduced corporate profits and political uncertainties take their toll.”
