Employment Situation Heats Up in June

The U.S. economy added 213,000 jobs in June, as unemployment rose to 4 percent

US jobs growth stronger than expected

The U.S. economy surpassed expectations in June, adding more jobs than expected even as the unemployment rate rose slightly to 4 percent. Revised figures for April and May bring the monthly average for this year to 214,000 jobs-up from 182,000 the year before.

Many analysts read the higher jobless rate as an encouraging sign because the influx of almost 76,000 job seekers back into the labour market last month suggested more people are optimistic they can find work thanks to the hotter economy.

The Labor Department said that average hourly earnings rose five cents, or 0.2% in June after increasing 0.3% in May.

The increase is above the gains required for the accommodation of the population growth and about 20,000 more compared to last year's average during the same period.

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Tapping into the potential pool of those who have given up looking for work, the job market seems to still have room for improvement. The labor force participation rate is still hovering near historic lows.

The job numbers for the month of June indicate US manufacturing continues to gain momentum. And as executives say they can not find enough qualified workers, many are turning to hiring people who are now incarcerated or people with disabilities. If, though, the unemployment rate reached 3.7 per cent or less in June, it would mark its lowest level since December 1969, when it was 3.5 per cent. And as is the case in most months, professional and business services as well as education and health services were the sectors that saw the largest increase in employment, with 50,000 and 54,000 jobs added in these sectors respectively.

"It's not your father's labor market anymore", said Diane Swonk, chief economist at Grant Thornton. The reason for the rise in the unemployment rate was "a stampede of people back into the labour force", he said.

Youth unemployment increased to 11.7 per cent last month, up from 11.1 in May.

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A CNBC panel called the report "great", "as good as it gets", and "steady as she goes".

America's labour market boomed again last month, strengthening the case for the Federal Reserve to raise interest rates twice more this year.

The report underscores a familiar refrain: There are lots of jobs being created, but not enough people to fill them.

In spite of the strong job gains and widely voiced complaints from employers about difficulties in finding workers, wage growth does not appear to be accelerating.

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Hassett pointed to the increase in labor force participation for African American women and Hispanic men and women as an encouraging sign that people are being drawn back to work. It has declined three-tenths of a percentage point this year and is near the Fed's estimate of 3.6 percent by the end of this year.

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