Low Unemployment Points to Controlled Economic Expansion

WASHINGTON D.C.—The United States Chamber of Commerce said today's Department of Labor report showing a drop in the nation's unemployment rate indicates that the economy is continuing to expand and create jobs, despite stepping down a notch from its rapid pace at the end of last year. The Chamber pointed to the new data in calling on the Federal Reserve to use caution in considering further action to raise interest rates.

"This report presents the clearest evidence yet that the economy has slowed in response to the Federal Reserve's interest rate increases," said Dr. Martin Regalia, Chamber vice president and chief economist. "Furthermore, it justifies the Fed's decision at its last meeting not to raise rates, and hopefully will give the Fed a reason to hold off again at its next meeting."

Today's Labor Department report showed a 0.1 percent decline in the jobless rate, from 4.1 percent in May to 4.0 percent in June. Total private sector employment, as well as the important manufacturing component, rebounded from its May declines to post healthy gains in June, Regalia noted.

The June report, which saw an increase of 206,000 new jobs, brought the average monthly increase in private sector jobs during the second quarter of this year to 110,000, down sharply from the 237,000 job-per-month pace of the last six months, but still a respectable pace. "Despite this obvious slowing, labor markets remain very tight as the unemployment rate continues to hover in the 4.0 percent range," said Regalia.

The U.S. Chamber of Commerce is the world's largest business federation, representing more than three million businesses and organizations of every size, sector and region.

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