The share of working-age Americans who are employed or at least looking for a job sank to the lowest rate since October 1977.+ READ ARTICLE
U.S. job growth slowed in June and Americans left the labor force in droves, according to a government report on Thursday that could tamper expectations for a September interest rate hike from the Federal Reserve.
Nonfarm payrolls increased 223,000 last month, the Labor Department said. Adding to the report’s soft note, April and May data was revised to show 60,000 fewer jobs were added than previously reported.
With 432,000 people dropping out of the labor force, the unemployment rate fell two-tenths of a percentage point to 5.3%, the lowest since April 2008.
The labor force participation rate, or the share of working-age Americans who are employed or at least looking for a job, fell to 62.6%, the weakest since October 1977. The participation rate had touched a four month high of 62.9% in May.
In addition, average hourly earnings were unchanged, taking the year-on-year increase to a tepid 2.0%.
But labor force participation dropped
The United States labor market put in a tepid performance in June, with the addition of only 223,000 jobs, according to a report released by the Bureau of Labor Statistics on Thursday.
That was short of analysts’ exceptions, which put estimates for June job growth in the 225,000 to 230,000 territory.
According to the household survey, unemployment declined to a seven-year low of 5.3% in June, after inching up to 5.5% in May.
Though the jobs report’s top line numbers were not too bad, a closely-watched sub-indicator didn’t show such good news: hourly wages remained flat in June. That stagnation could delay a long-awaited hike in interest rates. After the May jobs report showed that wages had increased by 8 cents per hour, Federal Reserve chair Janet Yellen said at a press conference June 17 that “wage increases are still running at a low level, but there have been some tentative signs that wage growth is picking up.”
Thursday’s report—released a day early because of the observation of the July 4th holiday on Friday—also showed that labor force participation dipped by 432,000 or 0.3% in June after an increase of similar size in May. The share of Americans participating in the labor market fell back from 62.9% in May to 62.6%–its lowest since 1977.
The number of long-term unemployed who’ve been without a job for 27 weeks or more declined by 381,000 to 2.1 million in June. Over the past 12 months that figure—which currently makes up 25.8% of the unemployed—has decreased by nearly 1 million.
The overall economy added 280,000 new jobs last month, but 77% of them were in these fields.
Despite unemployment remaining steady in May, the economy still produced 280,000 new jobs, beating the average monthly gain of 251,000 from the past year, the Bureau of Labor Statistics reported Friday. Since March, jobs have increased by an average of 207,000 per month.
Huzzah for you, job seeker. Your chance for a new gig continues to improve.
Of course, you’ll have an even better shot if you concentrate your search in these five fields‑-which accounted for three quarters of the new job growth last month:
1. Professional and business services
Jobs added in May: 63,000
Jobs added past 12 months: 671,000
Particular growth areas: computer systems design and related services, temporary help services, management and technical consulting services and architectural and engineering services
2. Leisure and hospitality
Jobs added in May: 57,000
Jobs added past 12 months: 57,000
Particular growth areas: arts, entertainment and recreation
3. Health care
Jobs added in May: 47,000
Jobs added past 12 months: 408,000
Particular growth areas: Ambulatory care services (which includes home health care services and outpatient care centers) and hospitals.
Jobs added: 31,000
Jobs added past 12 months: 288,000
Particular growth areas: automobile dealers
Jobs added: 17,000
Jobs added past 12 months: 273,000
Particular growth areas: none specified
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The nation’s unemployment inched up to 5.5%
The U.S. economy added a robust 280,000 jobs in May, and the unemployment rate rose to 5.5% from a near seven-year low of 5.4% in April, according to the latest employment situation report released by the Labor Department.
That number beat economists’ expectations of 225,000, and job gains came from a wide range of sectors, including professional and business services, leisure and hospitality, healthcare, and construction, to name a few.
The jobless rate rose because more people, such as new college graduates, entered the workforce, suggesting growing confidence in the jobs market.
Importantly, the report showed that wages increased by 8 cents per hour in May, and that wage growth has averaged 2.3% over the past year. While those gains aren’t extraordinary, they show that worker pay is increasing slightly faster than inflation, which should help bolster consumer spending and the overall economy going forward.
March’s job gains were revised up from 85,000 to 119,000, but job gains in April were revised down slightly. Overall, revisions of job gains for the previous two months means there 32,000 more U.S. jobs than previously thought. Over the past three months, job gains have averaged more than 200,000 per month, a key threshold that suggests that the weak GDP reading in first quarter of this year is a temporary blip rather than a harbinger of a broad economic slowdown.