June Payrolls Surge, but Probably Not Enough to Spur Fed

The U.S. economy rebounded from its unusual drop in employment growth, adding 287,000 new jobs during the month of June, according to a federal report Friday.

Employers shook off two months of weak hiring by adding 287,000 jobs in June, a robust pace that suggests a resilient USA economy recovering from a slump early in the year.

The U.S.jobs market picked up speed in June, new government data showed Friday, allaying fears that the economy was headed for a sustained slowdown after a weak start to this year.

Average hourly earnings were expected to increase by 0.2 percent in June, but they rose by just 0.1 percent - meaning most of the new jobs added were low-paying positions. Job growth occurred in a variety of sectors that affect demand for office and other real estate space, including business services, financial activities and information, though in the latter case, growth partly reflected the end of the Verizon strike.

Retail trade added 30,000 jobs last month, after remaining flat for the previous two months.

The unemployment rate edged up to 4.9 percent in June, from 4.7 percent, as people feeling more confident about their prospects returned to the job market. There seemed to be a sigh of relief this morning on Wall Street and Main Street that the economy is still solid, especially after Brexit.

But the data for June far exceeded analysts' expectations.

A broad measure of unemployment that includes people who want to work but have given up searching and those working part-time because they can not find full-time employment fell 0.1 per centage point 9.6 per cent, the lowest since April 2008.

Even with June's jobs bounce-back, forward momentum in the labor market has slowed.

At stake in this jobs report was confirmation that a hiring slowdown had not hit the United States of America economy. A modest 144,000 jobs had been added in April. May payrolls were revised down to show them rising 11,000 rather than the previously reported 38,000. "But the closer you get ... the pace of job growth slows, and the pace of wage growth hastens". Many people of prime working age may be sitting on the sidelines of the labor market or in jobs that do not fully utilize their talents. In the past 12 months, they have risen 2.6 per cent, the best year-over-year reading since December.

While the June jobs figure is eyebrow raising in a good way, it's unlikely to be enough to sway the Federal Reserve to raise interest rates at its July meeting. What's more, June was the 69th consecutive month of positive job growth, which is the longest on record.

Vanessa Coleman

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