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- Workers assembling cars at a Ford Motor plant in Chicago. The manufacturing sector, a major driver of growth in the last two years, has been cooling. The New York Times
Weak hiring in May had given rise to fears that the long-running expansion was foundering in the face of trade tensions and cooling growth overseas. But job growth rebounded sharply in June, the Labor Department reported Friday: Employers added 224,000 jobs, a larger figure than expected. And manufacturers, who are bearing the brunt of President Donald Trump’s trade war, added jobs at the fastest pace since January.
That resilience is good news for workers, who are benefiting from what is now, at least unofficially, the longest economic expansion on record. And it is a boon to Trump, who is expected to make the economy’s strength a centerpiece of his reelection campaign.
“Our country’s doing unbelievably well economically,” he told reporters Friday. Yet even as Trump celebrated the robust hiring numbers, he called again for the Federal Reserve to cut interest rates — a step that would ordinarily suggest worries about the economy’s direction. Growth “would be like a rocket ship” if the Fed acted, he declared.
Fed policymakers are expected to take that course at their meeting this month, though the strength of the latest job figures makes it likely that the reduction will be modest. Stocks initially fell almost 1% Friday on the rate outlook, but by the end of the day, the S&P 500 was down only 0.2%.
The job market has lost some momentum since last year, when tax cuts and increased government spending gave the economy a jolt. Employers have added an average of 171,000 jobs over the past three months, down from 223,000 per month last year. Wage growth, which picked up late last year, appears to have stalled again — average hourly earnings were up 3.1% in June from a year earlier, a pace that has barely budged in months. The unemployment rate rose slightly, although at 3.7% it remains near a multi-decade low.
Separate data from the Institute for Supply Management this week showed that both the manufacturing and services sectors grew in June by a variety of measures, though more slowly than in May.