By Liz Berthelette – Director of Research
The June employment numbers were released Friday July 7th and the data significantly exceeded expectations. After May’s poor numbers, concerns over a possible economic decline grew as May saw only 11,000 jobs added to the workforce. In June, employers added 287,000 jobs, well above the projected 175,000. This represents the strongest month of job growth since October 2015. These June numbers helped lay to rest the concerns of economic downturn inspired by the poor May numbers.
The unemployment rate did rise to 4.9% in June, from 4.7% in May. However, experts look at the increase in unemployment as an indicator of people re-entering the workforce, which is a benefit for the economy in the long-run. The employment market may be on the cusp of vigorous competition, as wages rose 2.6% over the course of the cycle, the largest growth since 2009.
The June data has been tied to the largest economic stories this month along with Brexit and the Federal Reserve’s ongoing discussion of raising interest rates. The return to steady job growth in June is welcome amidst the unrest over Brexit. While the aftermath of the decision did cause losses in the stock markets, it hasn’t led to a deeper economic recession within the U.S.
As for the Fed’s position on interest rates, these recent numbers lead experts to believe that rates won’t be raised this month. There is, however, a possibility of a rise later in the year, potentially as early as September. Traders of US short-term interest rate futures are projecting a 24% chance of a rate-hike by the end of the year, double what was projected prior to the release of the report, and a 35% chance by next June. The Fed will likely remain in wait-and-see mode to ensure that the United Kingdom’s decision to leave does not have any further impact on the economy.
The specific impact on Boston is yet to be seen, but may not be significant. The city is below the national unemployment average as it is, and is approaching full employment. The Bureau of Labor Statistics reports that the industries showing strong growth include healthcare and financial services, signaling a potential of job-growth within Boston. The healthcare industry added 59,000 jobs in the month of June, while the financial and information industries added another 50,000 jobs nationwide. Boston may not have seen much of a change in employment data, good news for the nation can only mean good news for the city.