The Fed and the markets welcomed a crucial piece of economic data on Friday that always helps to shape the monetary policy outlook – the official employment report for June.
According to the report of the US Department of Labor, the number of employees outside the agricultural sector rose by 222K in June, compared to the projected 178K figure. Jobs’ gain in May was downwardly revised to 159K.
The unemployment rate in the US last month rose to 4.4%, from 4.3% in April. Analysts had expected the indicator to remain unchanged.
The average hourly earnings in the United States rose by only 0.2%, falling short of consensus which called for 0.3%. Given that there is a state of almost full employment in the US, the Fed is likely to focus on the average hourly earnings. Salary growth remains the missing element in a good picture of the labour market and one of the main reasons that the Fed believes that inflation has not yet reached the 2% target.
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