U.S. job creation surges in June, pointing to market's resilience

Todd Singleton
July 8, 2017

However, the United States unemployment rate ticked higher to 4.4 per cent, from 4.3 per cent previously, and earnings were up only 2.5 per cent year on year, slightly lower than expected. Employment increased in health care, social assistance, financial activities and mining. It remains lower than the unemployment rate for nonveterans, which was 4.3 percent in June.

The labor force participation rate rose a tenth of a point to 62.8 percent in June, which is within two-tenths of a point where it's been since January.

The unemployment rate for all Americans increased from 4.3 percent in May to 4.4 percent in June.

Some strategists and economists are looking beyond the unemployment and monthly job gains numbers.

Average hourly earnings, which are a key measure of potential inflation pressures and are closely watched by economists, were expected to rise 0.3% over the prior month and 2.6% over the prior year. Loh said hourly earnings' 2.5 percent gain from a year earlier were disappointing, with growth slower than at the start of the year and mostly stagnant over the past several months.

Also, job growth in April and May was stronger than initially reported.

The average of 162,000 net new jobs a month so far this year is off last year's figure of 187,000.

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In its monetary policy report published on Friday, the Fed indicated that it's prepared to be "slightly more accommodative" if inflation continues to fall short of the central bank's target. But even with 81 consecutive months of job creation, a historically large share of Americans have opted out of the workforce and wage gains have remained below prerecession levels.

Economists forecast the economy grew at roughly a 2.5 percent pace in the April-June quarter.

"People are out of practice when it comes to asking for higher pay", said Mark Zandi, chief economist at Moody's Analytics.

At the current pace, the US would add about 1.9 million jobs in 2017.

Ambulatory healthcare services added 26,000 jobs last month, while nursing and residential care facilities lost 1,200 jobs in June. The veteran unemployment rate is based on a much smaller sample size in the agency's Current Population Survey than is the overall rate.

Republican President Donald Trump, who inherited a strong job market from the Obama administration, has pledged to sharply boost economic growth and further strengthen the labour market by slashing taxes and cutting regulation.

Other reports by Free-Prsite

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