- However, the increased unemployment rate is coupled with an increase in the labor force participation rate.
While the U.S. economy added slightly more jobs than expected, the national unemployment increased to 4.1 percent – the highest level since October 2021 – representing some 6.8 million people.
The number for long-term unemployed, those out of work for 27 or more weeks, rose by 166,000 to 1.5 million.
The unemployment rate hit its lowest point since 2020 in April 2023 at 3.4 percent. Since then, the rate has steadily climbed. Economic forecasts have been for the national rate to remain near 4 percent.
However, the increased unemployment rate is coupled with an increase in the labor force participation rate. According to the Labor Department, those able to work and are rose to 62.6%, up 0.1 percent.
The latest report from the U.S. Bureau of Labor Statistics also shows that nonfarm payrolls increased by 206,000 jobs in June, under the prior month’s gains by roughly 12,000. Job gains occurred in the sectors of government, healthcare, social assistance and construction.
As for average hourly earnings, nonfarm payrolls increased by 10 cents to $35.00. This represents a 12-month average hourly earnings increase of 3.9 percent.
Goldman Sach’s chief economist, Jan Hatzius, told the Wall Street Journal that immigration is making it difficult to forecast the level of job growth need to balance the labor market.
“Before the pandemic, economists at Goldman Sachs reckoned that, as a result of slowing population growth and more Americans hitting retirement age, the economy only needed to add around 70,000 to 80,000 jobs a month to keep the unemployment rate steady,” WSJ reported. “Now, as a result of the jump in immigration, they think it could be around 200,000.”
Hatzius thinks the best thing to do is watch the unemployment rate, WSJ notes, saying, “If it keeps turning higher in the months ahead, it will be an indication that the labor market has moved from a point of balance to one of deterioration.”
Frank Corder
