June Jobs Growth Solid
Employers added 224,000 jobs in June, the Bureau of Labor Statistics reported on Friday.
BLS said the unemployment rate ticked up by a tenth of a percentage point to 3.7 percent in June, in part because more people entered the workforce. The number of unemployed held steady at six million.
BLS revised down total nonfarm payroll employment for April from +224,000 to +216,000; and revised down May’s numbers from +75,000 to +72,000. With these revisions, employment gains in April and May combined were 11,000 less than previously reported. After revisions, job gains have averaged 171,000 per month over the past three months.
The report said the labor force participation rate, at 62.9 percent, was little changed over the month and unchanged over the year. In June, the employment-population ratio was 60.6 percent for the fourth month in a row. (
Analysts saw the report in different ways. Doug Duncan, Chief Economist with Fannie Mae, Washington, D.C., said the “robust” jobs report should ease some of the pressure that the Federal Reserve faces to cut rates at the upcoming July Federal Open Market Committee meeting. For the housing industry, he noted construction employment rose 21,000 this month and residential construction increased by 6,000 jobs, including specialty trade contractors, “which should help to lessen some of the supply constraints faced by home builders.”
However, Sarah House, Senior Economist with Wells Fargo Securities, Charlotte, N.C., noted while hiring rebounded in June, the pace of improvement in the labor market has softened. “With wage growth still not threatening inflation, the Fed will still likely cut rates in July,” she said. “The rebound confirms that the jobs market is hardly crumbling, but there were a number of signs that the pace of labor market tightening has cooled.”
BLS said average hourly earnings for all employees on private nonfarm payrolls rose by 6 cents in June to $27.90, following a 9-cent gain in May. Over the past 12 months, average hourly earnings have increased by 3.1 percent. Average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents to $23.43 in June. (
The report said the average workweek for all employees on private nonfarm payrolls was unchanged at 34.4 hours in June. In manufacturing, the average work week edged up 0.1 hour to 40.7 hours, while overtime was unchanged at 3.4 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls held at 33.6 hours.
“We look for businesses to add around 155K jobs per month in the second half of the year; that pace should be sufficient to keep the unemployment rate around 3.6% and wages rising a little over 3%,” House said. “However, with labor market slack no longer clearly diminishing and inflation continuing to fall short of 2%, we expect the FOMC to guard against the slowdown and cut the fed funds rate 25 basis points when it meets at the end of this month.”
