U.S. employers added a robust 195,000 jobs in June and many more in April and May than previously thought. The job growth suggests a stronger economy and makes it more likely the Federal Reserve will slow its bond purchases before year’s end.
The unemployment rate remained 7.6 percent. That was because more people started looking for work in June — a healthy sign. People without a job aren’t counted as unemployed unless they’re looking for one.
Hiring “continues to look more than strong enough to keep unemployment trending down … and probably more than strong enough to lead to Fed tapering starting in September,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics.
The Fed’s bond purchases have kept borrowing rates low to encourage borrowing and spending. A pullback in its bond buying would likely send rates up.
Pay rose sharply last month, the Labor Department’s monthly jobs report Friday, July 5, showed. Pay has now outpaced inflation over the past year.
Stocks opened sharply higher before sharply trimming their gains by midmorning. The yield on the 10-year Treasury note jumped from 2.56 percent to 2.69 percent, its highest level since August 2011. That’s a sign that investors think the economy is improving.
The economy has added an average 202,000 jobs a month for the past six months, up from 180,000 in the previous six. Hiring and consumer confidence have risen despite higher taxes and federal spending cuts that kicked in this year.
Friday’s report showed the economy added 70,000 more jobs in April and May than the government had previously estimated — 50,000 in April and 20,000 in May. Average hourly pay rose 10 cents to $24.01, 2.2 percent higher than a year ago.
The hotels, restaurants and entertainment industry added 75,000 jobs last month. Retailers added 37,000.
The health care industry added 20,000, construction 13,000. Temporary jobs rose 10,000. But manufacturing shed 6,000.
Many of the new jobs were part time. The number of Americans who said they were working part time but would prefer full-time work jumped 322,000 to 8.2 million — the most in eight months.