The job market is continuing to chug along despite uncertainty about the economy and how President Donald Trump’s tariffs could shake out.
Stocks, bond yields, and the dollar gained on Thursday but beneath the headline numbers, economists say there are some worrying signs that point to trouble ahead.
The U.S. labor market was stronger than expected in June, adding 147,000 jobs.
“The U.S. really is still the brightest spot in the global economy,” Rana Foroohar, Global Business Columist and Associate Editor at The Financial Times, said.
The strong gains sent stocks soaring Thursday. The Dow is nearing an all-time high, and the S&P 500 hit a new record, soothing nerves among investors worried about a potential economic slowdown due to uncertainty over President Trump’s tariff policies.
A healthy jobs market also takes some pressure off of U.S/ Federal Reserve Chair Jerome Powell to lower interest rates.
“President Trump has been asking him to cut rates,” Foroohar said. “Really hard to argue that you should be cutting rates when the economy is still so, so, so very strong.”
Yet beneath the top line number, economists are noting some trouble signs hidden in the data. The bulk of the growth was concentrated in just three sectors: health care, hospitality, and state and local governments.
But manufacturing employment, a key priority for the Trump administration, is down.
The report also reveals it’s getting more difficult for Americans to find work. The duration of unemployment is getting longer, with an increase in the share of people out of work for 27 weeks or more.
And while the pace of wage growth rose in June, it was slower than expected.