U.S. nonfarm payrolls increased by rose by 213k jobs in June. Data for April and May was revised to show 37k more jobs created than previously reported.

Job gains in June were almost broad. Construction payrolls increased by 13k after rising by 29k jobs in May. Manufacturers added another 36k jobs last month on top of the 19k created in May.

The unemployment rate rose to 4.0% from an 18-year low of 3.8% in June as more people entered the labor force in the sign of confidence in the jobs market.

The labor force participation rate rose to 62.9% last month from 62.7% in May. It had declined for three straight months.

Average hourly earnings rose five cents, or 0.2% in June after increasing 0.3% in May. That kept the annual increase in average hourly earnings at 2.7%.

The moderate wage growth should allay fears of a strong build-up in inflation pressures. The Fed's preferred inflation measure hit the central bank's 2% target in May for the first time in six years.

The market had forecast nonfarm payrolls increasing by 195k jobs last month and the unemployment rate steady at 3.8%. The employment report added to data such as consumer spending and trade that have suggested a sharp acceleration in economic growth in the second quarter.

GDP estimates for the April-June period are above a 4% annualized rate, double the 2.0% pace logged in the first quarter. But the Trump administration's trade policy, which has left the United States on the brink of trade wars with other major economies poses a risk to the labor market and economy.

President Donald Trump has imposed tariffs on a range of imported goods, including steel and aluminum, to protect domestic industries from what he says is unfair competition from foreign manufacturers.

Major trade partners, including China, Canada, Mexico and the European Union, have retaliated with their own tariffs. The U.S. and China slapped tit-for-tat duties on USD 34 billion worth of the other's imports on Friday.

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