ARLINGTON, Va.—While NAFCU’s Chief Economist and Director of Research, Curt Long, sees June’s jobs rebound of 287,000 jobs is a sign of labor market strength, he also believes the Federal Reserve will still likely wait at least until December for a rate hike.
“It wasn’t so strong that it’s going to tilt the Fed to raise rates faster than they might have otherwise,” Long stated in a recent report.
The unemployment rate increased to 4.9% as 414,000 workers joined the labor force. Average hourly earnings also increased 2 cents to $25.61 – bringing wages up 2.6%, year-over-year.
“This is a strong rebound from the tepid growth in May, and helps to ease some concerns of a sharp slowdown in the labor market,” Long wrote in a Macro Data Flash for NAFCU members. “However, April and May were revised down by a combined 6,000 jobs. The labor force participation rate ticked up in June, but has yet to return to the level seen earlier this year.
“Wage growth was modest while the overall trend remains positive,” he continued. “Overall, the labor market remains a positive for the economy and the gradual slowing in 2016 is suggestive of a market approaching full employment. Nevertheless, the Federal Reserve’s concerns lie elsewhere – primarily with weak business investment and slow growth abroad – and the FOMC is unlikely to raise rates before December.”