But then the AP quickly changes its happy tune about the June jobs numbers for the nation and – in a stunning about-face that contradicts its own initial assessment of the country’s job health – reveals the dark side of the just-issued Labor Department report.
At least 432,000 people dropped out of the labour force, pushing the unemployment rate two-tenths of a percentage point lower to 5.3%, the lowest since April 2008. Economists polled by MarketWatch had expected a 225,000 increase in nonfarm jobs. Employment was unchanged in the public sector. The job gains for April and May were revised down. The national rate for June, also reported Thursday, was 5.3 percent.
And average hourly earnings were flat from May at $24.95, and up a modest 2.0 percent year-on-year, lower than what most analysts had been expecting after the steady hiring gains of the past year. The Federal Reserve is waiting to observe whether the pace of wage growth is strong enough to warrant a rate hike this year.
” “This report illustrates both the progress we have made and the challenges that lie ahead”, Labor Secretary Thomas Perez said in an interview”. “The participation rates of the youngest workers declined, which was more of a barometer of limited job prospects than of anything demographic in nature”.
Thursday’s data also showed job growth slowed modestly in June, and as a result investors pared bets the Fed will raise rates in September.
There’s hope that wages will rise since unemployment has been so low for several months now, but that pick up has yet to happen.
The other dim spot in the report was the unemployment rate, which dipped primarily because of workers opting out of the labor force. This group accounts for 25.8% of the unemployed. In the first half of the year, employers added workers at an average rate of 208,000 a month, compared with a monthly gain of almost 260,000 jobs in 2014.
Oil-field companies, including Schlumberger, Baker Hughes and Halliburton, have announced thousands of job cuts after a more than 60 per cent plunge in crude oil prices previous year. Construction payrolls were unchanged after the industry ramped up hiring in recent months in response to a strong rebound in home building.
With the 2016 presidential campaign about to shift into a higher gear, there’ll be an increasing focus on the economy, on candidates’ plans to make things better for everyone.
Anecdotal evidence and other measures of wage growth suggest paycheques are getting fatter. An economist at George Washington University says, “Wages are the No. 1 way to attract people back to jobs”. Since the begining of 2013, the US country has added, according to my trusty Excel spreadsheet, exactly 223,000 jobs per month on average.
Employment numbers are a key to the US central bank’s thinking about when to begin normalizing policy. These increases are due to increased consumer spending.