Unexpectedly, Job Gains Increase to 224,000 in June

It had been widely expected that job creation numbers would stall out at 165,000, after a disappointing May number.

Why it matters: This is a significant rebound from the weak jobs report in May, calming concerns that the labor market -- the standout of the 10-year U.S. economic expansion -- was losing momentum at a rapid pace. It may, however, complicate financial markets' expectations of a series of interest rate cuts by the Federal Reserve starting as soon as this month.

Details:

May's numbers were weaker than initially thought at 72,000 (from 75,000). So were April's, which were revised lower by 8,000 jobs.

Employment growth has averaged 172,000 per month so far this year -- a slower pace than the average monthly gains of 223,000 last year.

One big bright spot: the manufacturing sector added 17,000 jobs in June after several months of cooling. But the industry has averaged 8,000 jobs per month -- a sharp drop from the average 22,000 jobs gained per month last year.

There may be a downside, though. Trump wants the Fed to cut interest rates, or at least stop hiking them. There had been rumors and speculation that, after May's number, the Fed feared it was raising rates too aggressively and might cut them or at least freeze them. But with June now showing good job growth, the Fed probably won't cut rates. It might take a pause in raising them, though, until it's clearer that we're growing or starting to fade.

posted by Ace of Spades at 02:35 PM

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