Employers added 224,000 jobs in June, the Labor Department reported Friday. Economists had expected a gain of about 170,000.
The job market rebounded last month after a dismal May, easing fears that the record-setting economic expansion could be running out of steam.
The June gain was stronger than economists had predicted, suggesting that trade tensions and cooling global growth have done little to sap the job market’s fundamental strength. Unemployment is near a five-decade low, wage growth is solid and employers have added jobs for 105 consecutive months, easily a record.
“There’s lots of talk about uncertainty, and maybe that’s going to lend itself to a weakening in hiring, but we haven’t actually seen it happen yet,” said Michelle Meyer, chief economist at Bank of America Merrill Lynch.
That resilience is good news for workers, who are benefiting from what is now, at least unofficially, the longest economic expansion on record. But it could complicate the decision facing Federal Reserve policymakers, who are weighing whether to cut interest rates to forestall a downturn, a jolt of stimulus that investors were expecting.
Even with June’s healthy growth, there are signs the job market has cooled since last year. Employers have added an average of 171,000 jobs per month over the past three months, down from 223,000 per month for all of 2018. Wage growth was disappointing in June and has stalled in recent months.
June marked the 10th anniversary of the official end of the Great Recession. And unless a new recession has begun (something economists often don’t know for several months), the expansion is now the longest on record.
The recovery has been more remarkable for its durability than for its strength. Hiring has been slower than in many past rebounds, and wage growth has been anemic until recently. Only lately have the gains extended to black and Hispanic workers, the less-educated, and those facing discrimination or other barriers to employment.
The job market picked up last year, at least partly because of tax cuts and government spending increases that provided a short-term boost to economic growth. But those effects are fading. Still, the expansion has repeatedly defied predictions that it was nearing an end.
Manufacturers added 17,000 jobs in June, the most since January. That should allay concerns that President Donald Trump’s trade war is dragging down the broader economy. Data from the Institute for Supply Management this week showed that the industry’s struggles continued in June, although the decline wasn’t as severe as some economists had predicted.
Still, economists say they don’t expect manufacturing to be the engine of growth that it was early in Trump’s term.
“Uncertainty remains very high for manufacturers and for companies with global exposure right now,” Meyer said. “They’re still producing to meet demand, but they’re not looking to exceed that. They’re being very cautious.”