Unemployment rate maintained at 3.6%, hourly wage 5.1%↑… July’s ‘Giant Step’ Prospects Higher
Contrary to market concerns that a recession will be triggered, the US labor market has yet to show any signs of breaking down.
As a result, the likelihood that the US central bank, the Federal Reserve (Fed), will take a ‘giant step’ (0.75 percentage point increase in interest rates at a time) for two months in a row this month, following last month’s, has increased.
The U.S. Department of Labor reported that non-farm payrolls increased by 372,000 last month, according to a report on the employment situation for June released on the 8th (local time).
This is almost the same level as the previous month (384,000 units), significantly exceeding the market forecast.
The forecasts of experts compiled by Bloomberg News were 265,000 and the Wall Street Journal (WSJ) had forecasts of 250,000.
In the meantime, some ‘big tech’ companies whose performance deteriorated following enjoying a special pandemic (a global pandemic) and some industries such as real estate sensitive to interest rates have announced layoffs one following another, but most industries are still focusing on job expansion. is interpreted as
According to the Ministry of Labor, 74,000 jobs were added in the professional office service industry last month, 67,000 jobs were added in the leisure and hospitality industry, and 57,000 jobs were added in the health care industry.
The number of people employed in the leisure hospitality industry is 1.3 million less than in February 2020, right before the novel coronavirus infection (COVID-19) crisis.
The unemployment rate in June was 3.6%, the same figure for the fourth straight month.
This is almost the same level as the 3.5% in February 2020, which was the lowest level in 50 years.
The labor force participation rate, which the Fed pays most attention to as a measure of employment recovery, was 62.2%, almost the same as the previous month, but 1.2 percentage points lower than just before the pandemic.
The average hourly wage was $32.08, up 0.1 dollar (0.3%) from the previous month.
It increased by 5.1% compared to the same month of the previous year, continuing the high growth rate of 5%.
The strength of the labor market shown in today’s indicators contrasts with the growing fear of a recession in the market.
After the employment report was released, the probability of the Fed raising the key rate by 0.75 percentage points in the interest rate futures market for the second straight month increased from 93% to 96%.
As a result, U.S. Treasury yields rose, and major indices in the New York Stock Exchange began to decline all at once due to the increased interest rate burden.
In an interview with CNBC on the same day, Atlanta Federal Reserve Bank President Rapier Bostik, who is considered a ‘dove’ (preferring monetary easing) wave, said, “We can raise 75 basis points (0.75 percentage points, 1 bp = 0.01 percentage points) at the next meeting. “I fully support the Giant Staff,” he said.
However, there is still the prevailing view that steeply rising interest rates will eventually weaken the US job market to some extent.
/yunhap news
