Jobs Report Shows Unemployment Near Record Low

The U.S. economy added 224,000 jobs in June, which is the best gain since the start of the year, and the unemployment rate is near a 50-year low.

CNBC reported that economists had only expected nonfarm payrolls to increase by 165,000. The unemployment rate is 3.7 percent.

The market is anticipating a cut in the benchmark interest rate later this month. The stock market opened lower, and government bond yields were positive, with the 10-year note up to 2.05 percent.

Andrew Hunter, senior U.S. economist at Capital Economics, said at the upcoming meeting of the Federal Open Market Committee that the report “would seem to make a mockery of market expectations” for the predicted rate cut.

The rate of employment growth “is still much stronger than the levels that have usually prompted the Fed to cut rates in the past, and although we do still expect the weakening economy to prompt the Fed to loosen policy, the first rate cut will probably be delayed until September,” he said.

U.S. President Donald Trump, who has been vocal about the Federal Reserve, said it needed to respond to the overall economic situation.

“We don’t have a Fed who knows what they’re doing,” Trump said. He added that the economy would respond like a “rocket ship” if interest rates were lower.

Job gains were led by business and professional services at 51,000. The healthcare sector gained 35,000 jobs, and 24,000 were added by the transportation and warehousing sector. Construction added 21,000 and manufacturing added 17,000.

In the past year, wages increased 3.1 percent, just below market estimates of 3.2 percent. The labor force participation rate went up as well to 62.9 percent, its best showing since March. The labor force itself went up by 335,000, which puts it at just below 163 million. The number of people not in the labor force dropped 158,000, to 96.1 million.