Construction jobs flat in June, but unemployment rate continues to fall

Construction jobs flat in June, but unemployment rate continues to fall

Construction jobs flat in June, but unemployment rate continues to fall

Analysts had expected 175,000 jobs to be added.

May's anemic 38,000 figure was downgraded to just 11,000 new jobs - while April's figure was upwardly revised from 123,000 to 144,000.

The feeling among economists is that the Fed's policymakers are not likely to put up interest rates this year, particularly because of the uncertainty created by Britain's vote to leave the European Union.

The May numbers were affected by a Verizon strike, but the weak showing was cited as a major factor in staying the Fed's hand at the June meeting.

The Fed raised rates in December for the first time in almost a decade.

Markit's chief economist, Chris Williamson, said: "It's far from clear whether June's bumper non-farm payroll increase reflects a renewed appetite for companies to hire staff". Over the year, average hourly earnings have risen 2.6%. That's still below the 3.5% or so the Fed would like to see, but it's a healthy bump from earlier in the year when wage growth was barely above 2%. But, modest wage growth over the year, and the continued headwinds for US manufacturing from global uncertainties and global slower growth mean the Federal Reserve should continue its policy of holding off interest rate hikes. "Or perhaps it is a function of low inflation expectations and low productivity, which restricts the ability or desire of businesses to raise wages". And the yield on the 10-year Treasury bond fell to a new all-time low of 1.366 percent. The so-called Brexit led to a sharp increase in the value of the dollar, which could hurt US exporters, because a stronger dollar makes American products more expensive overseas.

"Job growth has clearly slowed, that isn't surprising", said Ryan Sweet, a senior economist at Moody's Analytics Inc.in West Chester, Pennsylvania, and the best forecaster of USA payrolls over the past two years, according to data compiled by Bloomberg. The year-over-year increase was 2.6 percent, less than the 2.7 percent median forecast.

The U.S. has added jobs for 69 straight months, the longest streak on record, and the unemployment rate has dropped below 5 percent. Growth was also notable in professional and business services, retail trade and finance. Temporary-help jobs, a harbinger for future hiring, rebounded 15,200. In leisure and hospitality, payrolls jumped 59,000 in June. The June increase in part reflected the return of the 35,000 striking telecommunication workers in May.

While the June figure was big, the three-month average for job gains is only 147,000. That's generally enough to lower the unemployment rate, but it's below last year's monthly average of 230,000.

Economists say the deceleration is normal given the relatively advanced age of the economy's recovery from the 2007-09 recession, with the labor market now near full employment. The labor force participation rate rose to 62.7% from 62.6%, and the number of people who worked part time for economic reasons plunged.

Less "slack" in the job market: The unemployment rate isn't the only - or necessarily the best - indicator of how many Americans want jobs, because it counts only people who are actively searching for work.

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