WASHINGTON — U.S. employers sharply stepped up their hiring in June, adding a robust 224,000 jobs, an indication of the economy’s durability after more than a decade of expansion.

The strength of the jobs report the government issued Friday could complicate a decision for the Federal Reserve late this month on whether to cut interest rates to help support the economy. Most investors have anticipated a rate cut in July and perhaps one or two additional Fed cuts later in the year. That scenario may be less likely now.

Stocks sold off early Friday before paring their losses later. The Dow Jones industrial average closed down a modest 43 points. But the yield on the 10-year U.S. Treasury note climbed to 2.04% from just under 2% before the jobs report was released, reflecting a view that the Fed might now be less inclined to cut rates multiple times.

June’s solid job growth followed a tepid gain of 72,000 jobs in May, a result that had fueled concerns about the economy’s health. But with June’s pace of hiring, employers have now added, on average, a solid 171,000 jobs for the past three months. Last month’s burst of hiring suggests that many employers have shrugged off concerns about weaker growth, President Donald Trump’s trade wars and the waning benefits from U.S. tax cuts.

“Although there are drags on the economy in 2019, the expansion should continue through this year,” said Gus Faucher, chief economist at PNC Financial Services. “The doom and gloom was overblown.”

The unemployment rate ticked up to 3.7% in June from 3.6% for the previous two months, reflecting an influx of people seeking jobs who were initially counted as unemployed. Average hourly wages rose 3.1% from a year ago.

Trump responded to Friday’s jobs report by tweeting, “JOBS, JOBS, JOBS!” But the strong hiring gains have lessened the case, at least for now, for the Fed to slash rates as Trump has repeatedly and aggressively pressed the central bank to do.

“If we had a Fed that would lower interest rates, we’d be like a rocket ship,” the president asserted to reporters in an appearance Friday. “But we’re paying a lot of interest, and it’s unnecessary. But we don’t have a Fed that knows what they’re doing.”

Last year, Fed officials raised rates four times, in part to stave off the risk of high inflation and in part to try to ensure that they would have room to cut rates if the economy stumbled.

On Friday, the Fed reiterated that it would act as necessary to sustain the economic expansion, while noting that most Fed officials have lowered their expectations for the course of rates. The Fed’s statement came in its semiannual report on monetary policy.

In Friday’s jobs report for June, the hiring gains were broad. Construction companies added 21,000 workers after having increased their payrolls by only 5,000 in May. Manufacturers hired 17,000, up from just 3,000 in May. Health care and social assistance added 50,500 jobs. Hiring by transportation and warehousing companies increased 23,900.

The government sector was a major source of hiring, adding 33,000 jobs in June. Nearly all those gains were at the local level.

For Todd Leff, CEO of Hand & Stone Massage and Facial Spa, the resilience of the U.S. job market has provided both an opportunity and a challenge. With more Americans earning steady paychecks, demand for massages and facials has increased, and the company plans to add 60 locations this year and roughly 1,800 jobs. But the low unemployment rate has also made it hard to find and retain workers.

“We could hire 1,000 more employees today — if they were available,” said Leff, whose company has about 430 locations and is based in Trevose, Pennsylvania.

Investors have been turning their attention to the Fed, which has expressed concern about threats to the economy, especially the uncertainties from Trump’s trade wars, and about inflation remaining persistently below its 2% target level. A Fed rate cut, whenever it happens, would be its first in more than a decade.

Joshua Shapiro, chief U.S. economist for the consultancy MFR, said the likelihood of a Fed rate cut late this month is now slightly lower, though he still estimates that the federal funds rate — what banks charge each other — will be sharply lower by the end of next year.

Ryan Wang, U.S. economist at HSBC Bank, suggested that the solid jobs report might create a communications challenge for Fed Chairman Jerome Powell when he testifies Wednesday and Thursday to congressional committees.

The financial markets still foresee a rate cut of 25 points this month, Wang said, adding, “It will be important to see if Chair Powell lays out on a strong case for near-term monetary easing in his testimony next week.”

The sluggish pace of hiring in May had signaled that employers might have grown more cautious because of global economic weakness and, perhaps, some difficulty in finding enough qualified workers at the wages that companies are willing to pay.

The pace of the overall economy is widely thought to be slowing from annual growth that neared a healthy 3% last year. Consumer spending has solidified. Home sales are rebounding. But America’s manufacturing sector is weakening along with construction spending. Growth in the services sector, which includes such varied industries as restaurants, finance and recreation, slowed in June.

Overall, though, employers have been adding jobs faster than new workers are flowing into the economy. That suggests that the unemployment rate will remain near its five-decade low and that the economy will keep growing, even if only modestly.

Copyright 2019 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(24) comments

KR999

Why aren't the libs posting here that Trump isn't responsible for fixing our economy, that Obama did that before he left office? Oh, that's right, because Obama didn't fix it, he only made it worse! "What is a danger is that we stay stuck in a new normal where unemployment rates stay high, people who have jobs see their incomes go up, businesses make big profits, but they've learned to do more with less, and so they don't hire," he said. "And as a consequence, we keep on seeing growth that is just too slow to bring back the eight million jobs that were lost. That is a danger. So that's something that I spend a lot of time thinking about." * * Barack HUSSEIN Obama

jerseygrl42

ob did his best to destry this e3conomy by doubling the debt that our children and grands will have to deal with and oh yes he also sent $164 Billion to his Iranian buddies...Kudos to President Trump for working to undo the mess ob created ...unfortunately the Bengazi four will never know nor will the Fast and Furious victims

DickD

After the George Bush Great Recession, Obama had no choice and some of that was done by the Bush administration before Obama took office.

KR999

Oh, it's the old George Bush Syndrome again, huh Dick? Yeah, well Obummer had eight looooooooooog years to fix what you think Bush screwed up and in those years what he did amounted to little more then the dribble that was the better part of him dripping down his mamma's leg. In less then 3 years since he's been in office Trump has done what Barry HUSSEIN wasn't capable of doing and turned our economy around to become the best it's been in decades. And YOU KNOW IT! Trump in '20!!!

BunnyLou

Barry had both the house and senate under his control. He wasn’t concerned about doing anything about the economy other than make it as bad as he could so he could fundamentally change/divide America for the worse.

hayduke2

What has been the debt trend under the currrent president’s tenure - skyrocketing!!!!

KR999

And what was the "debt trend" under his predecessor? The fifth-largest! "Barack Obama: Under President Obama, the national debt grew the most dollar-wise. He added $8.588 trillion. This 74 percent increase was the fifth-largest. Obama's budgets included the economic stimulus package. It added $831 billion by cutting taxes, extending unemployment benefits, and funding public works projects. The Obama tax cuts added $858 billion to the debt in two years. Obama's budget increased defense spending to between $700 billion and $800 billion a year. Federal income was down, thanks to lower tax receipts from the 2008 financial crisis. He also sponsored the Patient Protection and Affordable Care Act. It was designed to reduce the debt by $143 billion over 10 years. But these savings didn't show up until the later years." https://www.thebalance.com/us-debt-by-president-by-dollar-and-percent-3306296 So hay, your point is...….?

hayduke2

And Trump will add about 30% to that amount that Obama had even though he isn’t dealing with a major recession! Looks to add over 5 trillion or more in an inherited strong economy.

KR999

Nothing but speculation on your part, hay. Do you have any data to back it up, or are you just trying to put your usual anti Trump spin on it?

DickD

And you don't think the sugar high from tax cuts for the billionaires and large corporations had nothing to do with this? Creating a huge deficit that we all will have to pay more taxes for later? That was never the way of the GOP, before Trump.

hayduke2

You obviously missed the other article on the economy that stressed solid growth since the end of the 2008 Great Recession. Go back and educate yourself and all of the pluses and minuses of the last ten years, including the enviable growth during the past president's tenure.

BunnyLou

With help wanted signs up everywhere what are the dems going to run on? A return to Obama era polices and job numbers? Good luck!

rikkitikkitavvi

They have nothing Bunny and they know it. They are running scared. The only way they will win is to cheat. That's why they want the Southern border wide open.

jerseygrl42

Exactly

DickD

OMG, we are scared, especially after all the polls show all of the Democratic candidates beating the cult leader, Donald Trump. [scared]

rikkitikkitavvi

Polls?[lol][lol][lol][lol][lol][lol][lol][lol][lol][lol][lol][lol][lol][lol][lol][lol]

KR999

I agree rikki, polls? [lol][lol][lol][lol][lol][lol][lol] Even after the '16 polls, some people are still just too simple minded to believe in them. [lol][lol][lol][lol][lol]

KR999

Luck, Bunny? They're going to need a miracle!

rikkitikkitavvi

Happens to be my favorite band. Saw them four times.

DickD

In your dreams that will haunt you forever after.[lol]

BunnyLou

Didn’t Biden just say on CNN “Russian interference with the Presidential Election wouldn’t happen on his and Barrack’s watch”. What?

KR999

Sure, and Creepy Uncle Joe wouldn't lie, now would he? [lol][lol][lol][thumbup]

rikkitikkitavvi

Or Russian interference.

KR999

Oh, I don't know, rik, Russian collusion almost worked for Hilarity, she just didn't pay enough. But I don't think any of the Dimocraps running this time have the financial resources to get it to work for them, and as much as they could use the help. too.

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