U.S. jobs growth stronger than expected

The U.S. economy added 213,000 jobs in June, as unemployment rose to 4 percent

US job growth strong but unemployment rate rises to 4%

More specifically, hiring in the manufacturing sector - which should be the most sensitive to retaliatory trade sanctions - is running at the fastest pace since 1998. But for now the sector, which accounts for about 12 percent of the US economy, appears in good health. Trump argues that the duties are necessary to protect domestic industries from what he says is unfair competition from foreign manufacturers. Manufacturing led the way with an increase of 36,000 jobs, 12,000 of which were in autos.

Payrolls rose 213,000 after an upwardly revised 244,000 advance, Labor Department figures showed on Friday. Hourly wages increased by 0.2 percent for an average annual increase of 2.7 percent, lower than analysts had hoped.

The Fed's preferred inflation measure hit the central bank's 2 percent target in May for the first time in six years and is expected to remain high, in part due to the tightening job market.

Still, if the additional jobs and that sort of wage growth don't make you smile, the rising unemployment rate should.

The labour force growth is likely to be welcomed by the Bank of Canada, which has been arguing that pockets of untapped market slack remain that could limit wage and price pressures.

The number has oscillated around the 5 percent mark for over a year, but this was the first time it broke the previous record of 4.8 percent.

Steady hiring and low unemployment shows the labor market continues to be an area of strength for the economy since the recession ended nine years ago.

Private employment rose by 202,000 (median estimate 190,000) after increasing 239,000; government payrolls rose by 11,000, most since August.

Nonetheless, an escalating trade war poses a clear threat.

The dollar fell to a three-week low against a basket of currencies on the employment report.

Hanging over the labor market are President Trump's tariffs on goods from some of America's largest trading partners, along with retaliatory charges. The participation rate, or share of working-age people in the labor force, increased to 62.9 percent from 62.7 percent the prior month.

Policymakers at the Federal Reserve, the U.S. central bank, monitor the report because they can raise interest rates when employment is close to full, wages are rising healthily and unemployment is low. But the average was skewed downward in June because the job seekers were mainly those with only a high school education or less, who are generally paid lower wages, Barrera noted. "Unequivocally, this is a nightmare situation". The unemployment rate nevertheless saw a small uptick.

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

The big story in Friday's report, however, was the increase in labor force participation, which rose from 62.7% in May to 62.9% in June.

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