Economic expansion observed in June, overcoming apprehensions about the economy
In June 2019, the US job market showed a mixed picture, with some sectors thriving while others faced challenges due to the combined effects of trade, tax, and monetary policies.
According to the latest jobs report, the US economy added 147,000 jobs, with a significant growth within individual and family services (+15,600). However, the manufacturing sector shed 7,000 jobs. Healthcare employment rose by 39,300 jobs, while private sector payrolls grew by 74,000 jobs.
Cory Stahle, an economist at Indeed Hiring Lab, noted that the job market remains strong, but gains may be concentrated in specific sectors, potentially leaving many job seekers outside of those sectors feeling little benefit.
The unemployment rate was lower than economists' expectations of 4.3%, standing at 4.1%. Eric Teal, chief investment officer for Comerica Wealth Management, anticipates continued low unemployment and potential upward pressure on wages, but does not expect interest rate cuts until there is clarity that inflation is contained.
The labor force participation rate remained unchanged at 62.3%, while the number of people working part-time for economic reasons remained steady at 4.5 million. The long-term unemployed (jobless for 27 weeks or more) increased by 190,000 in June to 1.6 million, accounting for 23.3% of all unemployed people.
Trade policies, including tariffs on Chinese goods and renegotiation of trade agreements, created uncertainty and slowed international trade, which restrained business hiring. Monetary policy tightening earlier in the year raised borrowing costs, likely curbing investment and hiring to some degree. Tax cuts from late 2017 had supported job growth but were not fully offsetting the emerging trade and monetary headwinds.
The June jobs report solidified the outlook for the Federal Reserve to leave interest rates unchanged for its fifth consecutive meeting later this month. However, following the report's release, the probability of a 25-basis-point interest rate cut in July declined from 23.8% to 6.7%, according to the CME FedWatch tool.
It's worth noting that these trends are consistent with the 2025 scenario where elevated tariffs and interest rates slow growth and hiring, causing a modest rise in unemployment and job market caution. Although exact data from June 2019 are missing, these dynamics are consistent with how trade, tax, and monetary policies typically interact with employment.
For those seeking precise job growth and unemployment rates linked directly to policy impacts, it is recommended to consult the Bureau of Labor Statistics archives or economic analyses from that period.
Economists like Eric Teal anticipate continued low unemployment rates, potentially leading to upward pressure on wages. However, he does not expect interest rate cuts until inflation is contained, due to the impact of trade, tax, and monetary policies on the economy. In the 2025 scenario, where tariffs and interest rates may slow growth and hiring, the job market might exhibit a modest rise in unemployment and increased caution. Thus, for a detailed analysis of job growth and unemployment rates directly linked to policy impacts, one might refer to the Bureau of Labor Statistics archives or economic analyses from that period. Meanwhile, investors might need to consider these factors when making decisions regarding wealth, finance, and business investments in the economy.
