US employers add 223K jobs; jobless rate falls to 5.3 pct

The economy gained 223,000 jobs last month, and the unemployment rate fell from 5.5 percent in May, the Labor Department said Thursday. The department also had to revise down, by 60,000, the number of jobs it previously said were added in April and May. Both construction and government employment were unchanged in June from the prior month.

Today’s employment report-which marks 64 consecutive months of private sector job growth-contains some encouraging news about the state of the USA labor market.

Ever since Federal Reserve Chair Janet Yellen took over the top job a year ago, she’s been determined to make America’s workers as important as bondholders. The housing market will benefit from strengthening labor market conditions for the average American, but continued good news like this will increase the likelihood of rate increase by the Fed in the fall.

“The lack of a sustained acceleration in wage growth could prompt the Fed to keep pushing back the timing of the first rate hike”, Dales told clients in a report. There were 653,000 discouraged workers in June (persons not now looking for work because they believe there are no jobs available), essentially unchanged from a year earlier.

Also, the unemployment rate fell to 5.3 percent, from 5.5 percent. Retailers added 33,000 jobs to payrolls, the health-care sector added 40,000 and leisure and hospitality increased by 22,000.

The weak employment report, which suggests the economy might have lost some of its recently found momentum, argues against the US central bank raising interest rates in September as most economists had been expecting.

His biggest concern? The labor force participation rate hit its lowest level since 1977 after declining a “fairly dramatic” 0.3% to 62.6%. Still, jobs in financial activities have grown by 159,000 over the year, with insurance accounting for about half of the gain. People who are out of the labor force are not included in the calculation of the unemployment rate.

But wages went nowhere, at 0% month-over-month and 2.0% year-over-year. More importantly, it supports the idea that the economy isn’t expanding at a pace that would prompt the Fed to raise rates swiftly, he added. The more accurate measure of unemployment and underemployment, which includes the number of people working part-time because they can not find full-time work, or because their hours have been cut back against their will, is 10.5 percent, a decline from May’s 10.8 percent. It also doesn’t help that wage growth flattened.

Along with the increase in the number of jobs was wage growth, a crucial ingredient that had not been plentiful in the economy. “But despite this progress, there is more work to do”, said Betsey Stevenson, a member of the Council of Economic Advisers, the White House.