Huitong.com July 3rd - The June employment report released by the United States on Thursday (July 2) showed that jobs increased slightly, but wages did not show growth, and the labor participation rate also declined again. In addition, some economic weaknesses that have been closely watched by Federal Reserve Chairman Janet Yellen have not improved. For example, the number of involuntary part-time workers is about the same as the previous month, and has remained at around 6.5 million in the past three months.
For the sake of these data itself, it may not be enough to prevent the Fed from hikes in September as expected by most people. However, the fact that wages did not grow is particularly contrary to what Fed officials hope.
Currently, investors have extended the expected time for interest rate hikes to 2016, and they already doubt whether the Fed will raise interest rates in a time of turmoil in the euro zone.
Senior US analyst Paul Dales at Capital Investment Corporation said that wage growth has not continued to accelerate, which may prompt the Fed to continue to postpone the first rate hike.
However, Dalles also said that as the job market continues to grow, the unemployment rate may approach full employment level, and the possibility of a rate hike in September is still high.
00 non-farm jobs increased by 223,000 in June, and this data is still considered to be stable and above the average so far this year. The unemployment rate fell from 5.5% to 5.3%, which is also within the range that Fed officials expect to reach by the end of the year. However, the decline in unemployment rate is due to the decline in the employment participation rate in the labor market from 62.9% to 62.6%. When calculating the unemployment rate, the number of people exiting the labor market is not taken into account.
Fed officials are encouraged by the stabilization of employment rates over the past year, viewing it as evidence that the economic recovery has benefited more areas of employment and motivated people to find jobs or start job hunting.
Allianz chief economic adviser to California Mohamed El-Erian said the downward trend was "troubled" and would spark debate over long-term economic stagnation and doubts about a rate hike in September.
The number of long-term unemployment people has dropped from the estimated 2.5 million to around 2.1 million, a decrease of nearly 400,000 may make the Federal Reserve feel relieved. But from this monthly report, it is impossible to see how many of them have found jobs and how many have withdrawn from the labor force, resulting in a decline in employment participation.
U.S. Bureau of Labor Statistics officials warned not to over-interpret smaller projects in employment reports. Such monthly survey-based projects may be more volatile.
However, for the Fed, the June employment report can only be said to be vague at best. The report could spark a debate over whether the U.S. full employment rate has declined -- if so, it could explain why wage growth remains weak and shake a major goal of the Fed.
In addition to moderate employment growth in June, the data that was seen as strong performance in April and May were also downgraded. Elise Gould, director of medical policy research at the Institute of Economic Policy, said that it is clear that the economy continues to put labor in a disadvantageous situation, so the Fed needs to maintain its current route. The copyright of the content of
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