US Job Growth Shines In June

US job growth surged more than expected in June and employers increased hours for workers, signs of labor market strength that could keep the Federal Reserve on course for a third interest rate increase this year despite benign inflation.

Non-farm payrolls jumped by 222,000 jobs last month, the Labor Department said Friday, beating economists’ expectations for a 179,000 gain.

Data for April and May was revised to show 47,000 more jobs created than previously reported.

While the unemployment rate rose to 4.4 percent from a 16-year low of 4.3 percent, that was because more people were looking for work, a sign of confidence in the labor market. The jobless rate has dropped four-tenths of a percentage point this year and is near the most recent Fed median forecast for 2017.

The average workweek increased to 34.5 hours from 34.4 hours in May. Labor market buoyancy could also encourage the US central bank to announce plans to start reducing its $4.2 trillion portfolio of Treasury bonds and mortgage-backed securities in September.

The Fed raised its benchmark overnight interest rate in June for the second time this year. But with inflation retreating further below the central bank’s 2 percent target in May, economists expect another rate hike only in December.

June’s employment gains exceeded the 186,000 monthly average for 2016, reinforcing views that the economy regained speed in the second quarter after a sluggish performance at the start of the year.

But the pace of job growth is expected to slow as the labor market hits full employment. There is growing anecdotal evidence of companies struggling to find qualified workers.

As a result, companies are gradually raising wages in an effort to attract and retain their employees. Economists expect worker shortages to boost wage growth, which has remained stubbornly sluggish despite the tightening labor market.

Average hourly earnings increased 4 cents, or 0.2 percent, in June after gaining 0.1 percent in May. That lifted the year-on-year increase in wages to 2.5 percent from 2.4 percent in May.

President Trump, who inherited a strong job market from the Obama administration, has pledged to sharply boost economic growth and further strengthen the labor market by slashing taxes and cutting regulation.

But Republicans have struggled with health care legislation and there are also worries that political scandals could derail the Trump administration’s economic agenda.

The economy needs to create 75,000 to 100,000 jobs per month to keep up with growth in the working-age population.

But there is still some labor market slack. A broad measure of unemployment, which includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment, rose to 8.6 percent last month from 8.4 percent in May, which was the lowest since November 2007.

The labor force participation rate, or the share of working-age Americans who are employed or at least looking for a job, rose one-tenth of a percentage point to 62.8 percent.

Employment gains were broad in June, with manufacturing payrolls increasing 1,000 after factories shed 2,000 jobs in May. But the automobile sector lost a further 1,300 jobs as slowing sales and bloated inventories force manufacturers to cut back on production.

Boeing has Huge Success in Paris

Boeing planes displayed at Paris Air Show, in Le Bourget, east of Paris, France, Tuesday, June 20, 2017 in Paris. Aviation professionals and spectators are expected at this week’s Paris Air Show, coming in, in a thousands from around the world to make business deals. (AP Photo/Michel Euler)

AA

PARIS – Boeing has landed a string of new plane deals while Airbus has won lucrative promises at the Paris Air Show, as both plane makers stressed the growing importance of digital technology in aviation.

Boeing announced firm orders Tuesday for more than 45 planes worth $5.4 billion at list prices, though customers routinely negotiate discounts. Buyers included Ryanair, China’s Okay Airways and the Aviation Capital Group leasing company.

The aerospace giant also took in tentative orders for a further 83 planes worth as much as $9.3 billion.

In addition, Boeing raised its forecast for new airplane demand, projecting the need for 41,030 new airplanes over the next 20 years valued at $6.1 trillion.

The company’s annual market outlook was released today at the air show, with total airplane demand rising 3.6 percent over last year’s forecast.

“Passenger traffic has been very strong so far this year, and we expect to see it grow 4.7 percent each year over the next two decades,” said Randy Tinseth, vice president of Marketing, Boeing Commercial Airplanes. “The market is especially hungry for single-aisle airplanes as more people start traveling by air.”

The single-aisle segment will see the most growth over the forecast, fueled by low-cost carriers and emerging markets. Some 29,530 new airplanes will be needed in this segment, an increase of almost 5 percent over last year.

Airbus said it had pledges Tuesday for 95 jets worth up to $10.4 billion at list prices.

Most of the orders were for single-aisle jets.

Airbus launched a new digital platform and Boeing forecast big growth in demand for technology and data to guide aviation industry decisions.

High-tech hardware is getting attention at this year’s Paris Air Show.

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