The US labor market saw weak job growth in June, with only 57,000 new jobs added, according to a recent report. The unemployment rate fell to 4.2%, but the decline was largely due to people leaving the labor force. The number of people reporting they had jobs also fell by around half a million.
Labor Market Trends
Despite the decline in the unemployment rate, the labor market trends are causing concern among economists. The number of people reporting themselves as unemployed dropped by 213,000, but the workforce fell in June by around 700,000. Since President Donald Trump returned to office, the workforce has declined by about 1.3 million.
The decline in the labor force is a discouraging sign for future growth, according to economists. The labor market is stubbornly refusing to reaccelerate, despite recent optimism. The implications for overall economic growth depend on both the number of people working and their average output.
Federal Reserve Response
The Federal Reserve is closely watching the labor market trends, and the weak job growth may renew debate about how to read the labor market. The Fed is considering whether to raise interest rates, but the uncertainty about the labor market is making it difficult to make a decision. San Francisco Fed President Mary Daly said that there is a scenario where growth may not continue to sustain itself, and the Fed needs to be cautious.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
