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Job Growth Surges in June, Jobless Rate Slips to 6.1%

Job Seekers Attend Career Fair
Scott Olson/Getty Images
By Lucia Mutikani

WASHINGTON -- U.S. employment growth jumped in June and the jobless rate closed in on a six-year low, decisive evidence the economy was moving forward at a brisk clip after a surprisingly big slump at the start of the year.

Nonfarm payrolls increased by 288,000 jobs, the Labor Department said Thursday. Data for April and May were revised to show a total of 29,000 more jobs created than previously reported.

It's an extremely bullish report ... I don't think you could have asked for a stronger read.

"It's an extremely bullish report. It's a report that really checks off all the positive boxes. I don't think you could have asked for a stronger read," said Jacob Oubina, senior U.S. economist at RBC Capital Markets in New York.

Economists polled by Reuters had forecast a gain of 212,000 jobs in June. It was the first time since the technology boom in the late 1990s that employment has grown above a 200,000-jobs pace for five straight months.

U.S. stock index futures were trading slightly higher in volatile trading after briefly dipping following the data, while prices for U.S. Treasuries fell. The U.S. dollar gained against a number of major currencies.

The closely watched employment report added to robust auto sales in June and data showing a steady manufacturing expansion in suggesting a plunge in economic output in the first quarter was a weather-driven anomaly.

Gross domestic product contracted at a 2.9 percent annual rate in the January-March period, causing a sharp downgrading of growth estimates for this year. Growth in the second half of the year is forecast around a 3.5 percent pace.

Average hourly earnings, which are being closely watched for signs of wage pressures that could signal dwindling slack in the labor market, increased by 6 cents in June. They were up 2 percent from a year-ago.

Labor Market Tightening

With new applications for jobless aid holding at lower levels and the share of businesses that cannot fill open positions rising, there is little doubt the labor market is tightening.

The unemployment rate dropped 0.2 percentage points in June to its lowest level since September 2008, despite a swelling of the labor force. The unemployment rate has declined from a peak of 10 percent in October 2009, driven by job gains and a shrinking labor force.

The labor force participation rate, or the share of working-age Americans who are employed or at least looking for a job, was steady at 62.8 percent. The share of Americans with a job rose to 59 percent, the highest since August 2009.

A broader measure of employment, which includes people who want a job but have given up searching and those working part-time because they cannot find full-time jobs, fell to 12.1 percent, the lowest level since October 2008.

The long-term unemployed accounted for 32.8 percent of the 9.5 million jobless Americans. The median duration of unemployment fell to 13.1 weeks from 14.6 weeks in May, the lowest in more than five years.

The improving tone of the labor market will be welcomed by the Federal Reserve and could spur debate on the timing of the first interest rate increase by the U.S. central bank.

Fed Chair Janet Yellen has argued that there is still considerable slack in the labor force, citing the low labor force participation, which she says partly reflects the departure of discouraged job seekers who could be enticed back into the workforce if conditions were to tighten.

Investors raised bets on an earlier rate hike, with futures markets showing a 55 percent probability of an increase in June 2015, up from just over 50 percent before the data.

"The real question is when do we start looking for and pricing in that first interest rate hike?" said Darrell Cronk, deputy chief investment officer of Wells Fargo Private Bank in New York.

"This data definitely leans toward, it doesn't make the full argument, but it leans toward pulling forward that time horizon as the job market strengthens."

Most economists don't expect the U.S. central bank to raise rates until the middle of next year at the earliest, but with the labor market tightening that could change.

The Fed has kept benchmark overnight lending rates near zero since December 2008.

Job gains in June were across all sectors. Manufacturing payrolls increased by 16,000, rising for the 11th straight month. Construction jobs advanced for the sixth consecutive month of gains.

Services industries employment jumped by 236,000, the biggest increase since October 2012, while government employment increased 26,000. The length of the workweek was steady at 34.5 hours.

-Additional reporting by Karen Brettell and Charles Mikolajczak in New York.


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195 Comments

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dopey.obamite

Reading through the comments, clark.......funny thing about your assertion that TARP was a socialist move by Bush, is that socialists don't see TARP as socialism.

July 04 2014 at 10:55 PM Report abuse rate up rate down Reply
1 reply to dopey.obamite's comment
clark8642

Well if socialists say it wasn't socialist that is good enough for me. I merely note that the law resulted in important means of production coming under government ownership. And I further note that the current President informed the decisions to return those assets to private hands. Food for thought next time the commie and socialist name calling begins.

July 05 2014 at 10:35 AM Report abuse -1 rate up rate down Reply
7 replies to clark8642's comment
teabuster2

d.barack

It's not my fault you follow commies .
=======================================
Are you hammered???????

July 04 2014 at 8:27 PM Report abuse rate up rate down Reply
teabuster2

Look at all the nonsense comments from d.barack

July 04 2014 at 8:25 PM Report abuse rate up rate down Reply
clark8642

So we see a Republican President pushing TARP and his followers are calling the man who unravelled his takeover of means of production a socialist. Nothing new. Name calling gone wild. Look up the term socialist Dbar and then enlighten us with some more sophisticated rhetoric.

July 04 2014 at 8:09 PM Report abuse -1 rate up rate down Reply
1 reply to clark8642's comment
dopey.obamite

Does that make all who voted for it socialists as well?

Anytime the US government buys controlling interests in American corporations it's a bad thing. Fortunately, (not entirely sure) the banks and car companies have bought their companies back from big uncle.

Obama is a marxist. His agenda is the same as 8 heard sam webb on CSPAN talking about at the communist party USA national convention on June 13, 2014. We still live in a constitutional repblic and there are still enough normal people here to stop him from his true fundamental transformation goal.

July 04 2014 at 9:10 PM Report abuse rate up rate down Reply
clark8642

DBar. Again I say TARP and again I say WMD. When you come up with a response we can discuss it. In the meantime good luck with coming up with names.

July 04 2014 at 6:14 PM Report abuse rate up rate down Reply
1 reply to clark8642's comment
clark8642

The loss of confidence in government engendered by the WMD debacle will be with us for years. The dead and wounded and the pain of their families forever. As to communist or socialist tell me again how TARP, whereby the government acquired important men's of production, pushed by President Bush, was matched by anything of this President who sold off those assets. Anything. President Obama has made serious mistakes, particularly signing off on the American Taxpayer Relief Act of 2012. No tax cuts should have been approved, for any of us, until after spending cuts sufficient to offset the cuts were approved.

July 04 2014 at 6:36 PM Report abuse -1 rate up rate down Reply
1 reply to clark8642's comment
dopey.obamite

GM and Chrysler purchases were not bush. They were obama....and everything after that was timing. TARP was passed a little over 2 months left of bush's term. We took a big loss.on his sale of GMs final shares, and his timing of the sale like everything he does was purely political.

July 04 2014 at 9:18 PM Report abuse rate up rate down
teabuster2

progressivehoax

Somey, you're a dunce. LMFAO
====================================
It really takes an exceptionally intelligent individual to come up with this comment, and here again, that's why you're a bagger.

July 04 2014 at 2:08 PM Report abuse rate up rate down Reply
teabuster2

Is there finally light at the end of the Bush with a GOP house and senate economical debacle tunnel???

July 04 2014 at 12:45 PM Report abuse -2 rate up rate down Reply
1 reply to teabuster2's comment
progressivehoax

It's the Pelosi, Reid, Frank, Dodd and Obama debacle.

July 04 2014 at 1:59 PM Report abuse +2 rate up rate down Reply
TINKDAY

What a joke 82% of the jobs created were in the service industry, seasonal, part time, low pay , no benefits and that is signs of a good economy, please

July 04 2014 at 12:29 PM Report abuse -2 rate up rate down Reply
1 reply to TINKDAY's comment
teabuster2

Since when does the party of plutocracy promote decent paying jobs with benefits????

July 04 2014 at 12:42 PM Report abuse -2 rate up rate down Reply
dseel1

Wonder if President Obama read this in the Wahington Post yesterday morning?
"Last month, 523,000 full-time jobs were lost, while 799,000 part-time jobs were added. Another way of looking at these numbers is that almost all of the 288,000 jobs created last month were just part-time positions. And remember, not even that would happen if President Obama got his way and raised the minimum wage during this anemic recovery. " WAPO 7/3/14

July 04 2014 at 10:32 AM Report abuse -1 rate up rate down Reply
1 reply to dseel1's comment
clark8642

Or the front page article today in the Post with the heading 'June job numbers point to an economic rebound' and the subheading 'Gain of 288,000 adds to streak, but part-time work tempers optimism'. Yesterday the President agreed that a lot more needs to be done on the jobs front and the economy. As did Chairwoman Yellen of the Fed. Yet everyone agrees we have come a long way since the near collapse of 2007-08 although we could have done better if we had all worked together. Happy Fourth of July and my gratitude to the troops defending our freedom and to their families.

July 04 2014 at 11:04 AM Report abuse +1 rate up rate down Reply
4 replies to clark8642's comment
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