US adds 206,000 jobs in June, jobless rate ticks up

The US added a solid 206,000 jobs in June while job gains in the prior two months were revised downward and wage gains cooled.

The job gains, which beat analyst estimates, followed downwardly revised 218,000 job gains in May and 108,000 gains in April, the Bureau of Labor Statistics (BLS) said today, for a combined downward revision of 111,000 for the prior two months.

The US generated a monthly average of 220,000 jobs in the 12 months through May. Economists expected gains of about 190,000 in June, according to a survey by Trading Economics.

The jobless rate ticked up to 4.1pc, the highest in more than two years, from 4pc. Still, the unemployment rate remains near five-decade lows.

Construction added 27,000 jobs, while manufacturing lost 8,000 jobs. Gains also occurred in government, health care and social assistance.

Average hourly earnings rose by 3.9pc from a year earlier, down from a 4.1pc annual gain in the prior month and the lowest in three years.

Futures markets after the jobs report indicated a 71.8pc chance the Fed will cut its target rate by a quarter point from a 23-year high in September, up from 68.4pc odds on Wednesday.

The Federal Reserve, after its last policy meeting in mid-June, had penciled in one likely quarter point rate cut was likely this year, paring that from a likely three cuts shown in March. Still, it also said it needs to see evidence that inflation is "sustainably" slowing towards its 2pc target before beginning to cut rates from 23-year highs.

By Bob Willis