The U.S. Bureau of Labor Statistics (BLS) has reported that the U.S. economy generated 222,000 jobs in June, more than the 178,000 that economists had expected. The tally represents the largest jobs increase since February, and brings the monthly average for April through June to 194,000.
The majority of job creation took place in the Healthcare and Social Assistance industries, which saw 59,000 more jobs last month. Next were Education and Health Services (45,000), Leisure and Hospitality (36,000) and Government (35,000). The goods-producing sector added 25,000 jobs, including 16,000 in Construction, 8,000 in Mining and Logging and 1,000 in Manufacturing.
June’s robust job creation continues the recent trend of better-than-expected numbers: May’s 152,000 new jobs was revised up from 138,000, and April’s 207,000 was revised up from 174,000.
Meanwhile, the labor force participation rate ticked up slightly to 62.8%, while average hours worked per week increased marginally to 34.5. The unemployment rate increased slightly to 4.4% and the number of unemployed reached 7 million, both largely unchanged from the previous month. Since January, unemployment has decreased by 0.4%.
However, wage gains in June increased just 0.2% from May and 2.5% from a year ago, a rate that has stayed about the same for the past two years.
The increase in job creation “is another illustration that the real economy is in good health,” Paul Ashworth, chief U.S. economist at Capital Economics, told CNBC. “The only disappointment is that wage growth still shows few signs of accelerating.”
In a report released in response to the BLS’s job numbers, the Federal Reserve addressed the fact that, though there are more jobs and more participation in the workforce, wages are largely stagnant. “Despite the broad-based strength in measures of employment,” it states, “wage growth has been only modest, possibly held down by the weak pace of productivity growth in recent years.”
The Fed raised its benchmark interest rate by a quarter point on June 14, reflecting a renewed confidence in the American economy after a lengthy period of maintaining it near zero to encourage investment. It’s expected to raise the rate at least once more before the end of the year, in order to ease any inflation that might occur as employers offer more pay to attract workers in a tight job market. However, the slow wage growth reported by the BLS indicates that employers are not yet feeling pressured to offer increased pay.
“The wage numbers are certainly weaker than expected,” Jim O’Sullivan, chief United States economist for High Frequency Economics, told the New York Times, “so it keeps alive the whole debate about the relationship between slack and inflation, and how far the Federal Reserve should allow the unemployment rate to fall.”