U.S. businesses created nearly 200,000 new jobs for the third month in a row in June, helping to hold the unemployment rate steady at 7.6 percent, the Labor Department reported Friday morning.
Almost all the 195,000 new jobs in June were in services such as health care, retail and hospitality, as manufacturing jobs continued to slump amidst lost exports during the month.
States and the federal government continued to shed jobs as budget-cutting held sway in state capitals around the country. States eliminated 15,000 positions while the federal government cut 5,000, but that was partially offset by a 13,000 increase in local jobs in education.
“These buoyant numbers suggest that companies remained keen to hire in June,” said Chris Williamson, economist at Markit, noting that the department found an extra 70,000 jobs were created in April and May in revisiting previous jobs reports.
The “upbeat” jobs picture lends support to the Federal Reserve’s plans to start withdrawing the extraordinary liquidity it has been infusing into the economy by the end of the year, he said.
The yields on U.S. 10-year Treasury bonds shot up to a two-year high of 2.69 percent in anticipation of possible Fed action to tighten the money supply. The dollar surged in foreign exchange markets as global investors were impressed by the solid, steady pace of U.S. job creation.
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The pick-up in job growth spurred a small rally in stocks as well, as the market basked in evidence that the economy is overcoming the drag from recessions overseas and budget cuts at home. In the first 15 minutes on a slow trading day, the Dow Jones index, the broader S&P 500 and the Nasdaq markets were all in positive territory.
“This jobs report is really great,” said Yohay Elam at Black Centaur Forex, noting that the pace of job creation, at nearly 200,000 a month, is healthy enough to enable the Fed to stop juicing the economy with low interest rates.
There was even a small uptick in the number of workers seeking jobs, suggesting that unemployed people are also getting the message that more jobs are available and are coming back into the workforce, he said.
As the job market gathered momentum, average earnings picked up a bit during June, with the yearly advance in hourly wages ticking up to 2.2 percent, the department said. Wages remain depressed compared to their performance during past U.S. economic recoveries, however.
• Patrice Hill can be reached at phill@washingtontimes.com.
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