Friday’s jobs numbers helped lift the probability of a December 2016 rate increase, but employment is only one factor that Federal Reserve Chair Janet Yellen and the Federal Open Market Committee have to consider later this month, when they convene again to discuss rates.
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United States employers added new workers at a surprisingly strong rate in June after an unnerving stall in May, delivering a fresh sign of USA economic strength, the Labor Department reported today. Economists surveyed by Bloomberg had forecast that the US would add 180,000 jobs to its rolls in June. But wages appear to be increasing gradually; they were up 2.6% from a year ago, compared with an annual average of about 2% during most of the recovery.
That sentiment signaled a shift from their April meeting, when many Fed policymakers had indicated that they were prepared to raise rates as soon as June if the job market and the economy continued to improve.
Recent data on consumer spending and housing suggests that economic growth accelerated from the first-quarter’s anemic 1.1 percent annualised rate. The Atlanta Federal Reserve Bank is now forecasting the economy growing at a 2.4% pace in the second quarter. Manufacturing jobs rose by 14,000 after shedding 16,000 jobs in May, while employment in construction held unchanged after two straight monthly declines.
Private businesses and government authorities generated 287,000 new positions last month, 112,000 more than analysts had expected. Retail rose 30,000 and leisure and hospitality sectors gained 59,000 jobs.
However, the uptick in unemployment rate reflected a rebound in the number of people in the labor force, which soared by 414,000 people in June after plunging by 458,000 people in May. It is important to note that this month’s figure also includes the additional 35,000 Verizon workers who were on strike last month.
“I believe last month was an outlier that’s not likely to repeat this month”, said Andrew Chamberlain, chief economist at Glassdoor, an employment website.
“The surge… suggests that the sharp slowdown in the preceding months was nothing more than a blip”, he said.
Every month, the Bureau of Labor Statistics compiles and publishes data tracking how many people are moving between employment and unemployment, and more broadly, how many people are entering and leaving the labor force.
Employers added 287,000 jobs in June, up sharply from a meager addition of only 11,000 jobs in May. The economy and stock market, meanwhile, have rebounded smartly, fueling speculation that job growth would follow. Crude oil posted a two-sided trade as the market mirrored the movement in the U.S. Dollar. That is still below traditionally healthy growth of about 3.5 percent.
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The jobless rate for black Americans, for example, climbed to 8.6 percent from 8.2 percent.
