America’s unemployment rate could fall to its lowest point in half a century when the Labor Department releases the June jobs report at 8:30 a.m. ET on Friday.
1. How low can we go? Unemployment stands at 3.8%, the lowest since 2000. If it dips to 3.7%, it will be the lowest since 1969. That would be another milestone in the recovery from 10% unemployment in 2009. Economists polled by Thomson Reuters predict it will hold steady at 3.8%, but many believe it will keep falling over time as businesses drain the remaining slack from the labor force.
2. Job growth marches on: The economy has added an average 207,000 jobs a month this year after a blowout number of 223,000 in May. Economists predict businesses added 195,000 jobs in June. Employers are having a tough time finding qualified workers, and economists believe the tight labor market will hold gains in check. One illustration of how hard it is to find employees: Job openings outnumber unemployed workers, according to the Labor Department.
3. Wage watch: Wage growth, which has been weak for most of the economic recovery, has strengthened in recent months. Economists project hourly wages in June climbed 0.3% from May and 2.8% compared with the same point last year. Although economists have argued that employers will offer better pay to workers as the labor market continues to tighten, “wage growth continues to be disappointing,” said Bankrate senior economic analyst economist Mark Hamrick. Wages are barely outpacing inflation, which has crept up to 2%.
4. Tariff ripple effects? It’s not clear yet that the Trump administration’s tariffs, and retaliation from other countries, have slowed the economy. But anecdotal reports suggest at least some businesses are laying off workers, moving production overseas, and putting hiring on hold. And Federal Reserve officials are increasingly worried about a trade war. “Tariffs create uncertainty for the overall business environment,” Hamrick said.
CNNMoney (New York) First published July 6, 2018: 12:02 AM ET