‘The continued vitality in the U.S. labor market means that the Fed is on track to begin shrinking its balance sheet in September and to raise rates again in December.’ – Nariman Behravesh, IHS Markit
US private companies showed a stronger-than-expected job growth in June, indicating that the labour market continued strengthening further. The official Labour Department’s report showed that the country’s private sector added 222K jobs last month, surpassing market expectations for a modest increase of around 175K in June. Meanwhile, May’s figure was revised up to 152K from 138K registered previously. The US non-farm payrolls increase, the second largest within this year, was supported by strong gains in government, healthcare, restaurants as well as business and professional services sectors, the Labour Department revealed. Notwithstanding job growth acceleration, the unemployment rate was slightly higher, at 4.4%, suggesting that more people were left without job. In addition, the report showed that average hourly earnings rose modestly, jumping 0.2% over the month of June, with 2.5% yearly increase in wages. Analysts believed that weak productivity was curbing wages, while some of them were optimistic over the tightening labour, expecting it to spur wage growth at a faster pace.
