US adds solid 224,000 jobs, making Fed rate cut less certain

Associated Press

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 percent from just under 2 percent 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 percent in June from 3.6 percent for the previous two months, reflecting an influx of people seeking jobs who were initially counted as unemployed. Average hourly wages rose 3.1 percent from a year ago.