U.S. adds 213000 jobs in June, unemployment rate jumps to 4%

The US added 213,000 new jobs for the month, well above analyst expectations, but the jobless rate rose 0.2 points to four percent, erasing May's improvement.

The labour force expanded by 75,600 in June, the biggest one-month increase in six years, Statistics Canada reported Friday from Ottawa.

The U-6 unemployment measure-which includes those who have given up searching for work, are marginally attached to the labor force (due to lack of steady employment), and those who are forced to work part-time but would like to work full-time-also moved up by 0.2 percent to 7.8 percent over May's report. And the unemployment rate remains at its lowest in more than 18 years.

"The solid 213,000 gain in non-farm payrolls in June, which followed an even stronger 244,000 rise in May, illustrates that labor market conditions remain unusually strong", said Andrew Hunter, U.S. economist at Capital Economics.

"Fortunately the economy has a good head of steam going into a period of significant uncertainty in terms of the impact of higher tariffs across a broad range of imports and exports", said Brian Bethune, chief economist at Alpha Economic Foresights in Boston. But for now the sector, which accounts for about 12 percent of the USA economy, appears in good health. Over the past year, it has added more than a half-million jobs.

The data for demographic groups came from a survey of households that is part of the Labor Department's monthly jobs report. Construction added 13,000 jobs, while retail lost 22,000 - nearly all the jobs it had gained the month before.

Economists polled by Reuters had forecast nonfarm payrolls increasing by 195,000 jobs last month and the unemployment rate steady at 3.8 percent.

"Overall, this "not too hot, not too cold" report supports our call for four Fed rate hikes in total this year", Gregory Daco, head of USA macroeconomics at Oxford Economics in NY, said in a note. The central preoccupation of the Federal Reserve, as shown in its just-released minutes for June, is preventing such a push by raising interest rates, without at the same time collapsing inflated stock values.

Every sector of the economy added workers in June except retail, which lost 22,000 jobs to offset gains in May.

From Table B-8, there were the same hourly and weekly earnings increases across all types of work, +2.7% and +3.0%, but for construction alone, the gains were better, +3.5% hourly and +4.3% weekly.

Signs of strength have helped bolster hiring despite the difficulty many employers say they're having in finding enough qualified workers to fill jobs.

Automakers added 12,000 jobs in June, but the tariffs could weigh on that industry's job growth in the coming months.