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Tags: nonfarm payrolls | jobs | employment | unemployment

Unemployment Rises to 4.9 Percent as More People Enter Work Force

Unemployment Rises to 4.9 Percent as More People Enter Work Force
(Stock Photo Secrets)

Friday, 08 July 2016 08:39 AM EDT

The unemployment rate rose to 4.9 percent as more people joined the work force, while wages climbed less than economists had forecast.

Payrolls climbed by 287,000 last month, exceeding the highest estimate in a Bloomberg survey, after a revised 11,000 gain in May, a Labor Department report showed Friday. The median forecast in a Bloomberg survey called for a 180,000 increase.

The figures will help reassure workers and Federal Reserve policy makers alike that companies are staying the course on hiring in the face of weaker profits and overseas developments such as Britain’s vote to leave the European Union. While job growth may be moderating as the economy approaches full employment, wages are slowly picking up and will underpin consumer spending.

The weight of evidence suggests “that the May jobs report exaggerated the degree of slowing in the labor market,” Michael Feroli, chief U.S. economist at JPMorgan Securities LLC in New York, said before the report. Job growth is “obviously not as booming as we were seeing over much of the last few years, which was probably unsustainable.”

Payrolls in leisure and hospitality registered the biggest gain since February 2015, health care providers took on the most workers since October and factories added the most jobs in five months.

June payrolls were boosted by the return of 35,100 striking workers at Verizon Communications Inc. Estimates in the Bloomberg survey for total employment ranged from gains of 50,000 to 243,000 after a previously reported 38,000 May increase. Revisions to prior reports subtracted a total of 6,000 jobs to overall payrolls in the previous two months.

The unemployment rate, which is derived from a separate Labor Department survey of households, increased from 4.7 percent in May.

The labor force participation rate, which indicates the share of working-age people who are employed or looking for work, crept up to 62.7 percent from 62.6 percent.

The Labor Department’s figures on labor underutilization dropped to 9.6 percent in June, the lowest since April 2008, from 9.7 percent, reflecting a slump in the number of people working part-time for economic reasons.
Employee Wages

Wages improved modestly, with average hourly earnings climbing 0.1 percent from a month earlier. The year-over-year increase was 2.6 percent, less than the 2.7 percent median forecast.

The average work week for all workers held at 34.4 hours in June.

Factories increased payrolls by 14,000 after a 16,000 decline the month before, the latest indication that the industry is stabilizing after damage wrought last year by a strengthening dollar and plunging oil prices. Employment at construction companies was unchanged after falling in May.

Among services providers, retailers boosted payrolls by almost 30,000, while employment in health care climbed 58,400. In leisure and hospitality, payrolls jumped 59,000 in June.

After the U.K.’s June 23 referendum led a vote to withdraw from the EU, policy makers around the world are watching for signs that weakness stemming from the heightened uncertainty is damping growth. Central banks have pledged to support global liquidity levels, and Fed officials say they are closely monitoring the situation.

Minutes from the Fed’s June meeting revealed that the policy makers wanted proof that job creation would resume a healthy pace and economic momentum remained intact.

© Copyright 2024 Bloomberg News. All rights reserved.

The jobless rate rose to 4.9 percent as more people entered the labor force. Wages advanced less than projected.
nonfarm payrolls, jobs, employment, unemployment
Friday, 08 July 2016 08:39 AM
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