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U.S. economy adds 213k jobs in June


The U.S. economy continued its nearly eight-year unbroken streak of jobs gains in June, but the unemployment rate edged up on a wave of new job seekers.   

jobjuneJob additions totaled 213,000 in the month, and the April and May readings were revised upward by a total of 37,000 jobs, the U.S. Department of Labor reported on Friday. Over the past three months, nonfarm job gains have averaged 211,000.

The unemployment rate edged up by 20 basis points to hit the 4 percent threshold, but that was caused by an uptick in labor participation, economists say. The civilian labor force grew by 601,000 and the labor participation rate edged up by 20 basis points, to 62.9 percent.  

The unemployment rate remained 30 basis points lower than a year ago.

Hourly wages increased by 5 cents to $26.98. Over the year, average hourly earnings have increased by 72 cents, or 2.7 percent, the Labor Department reported.

"Today’s report is more good news for the U.S. economy,” said Len Kiefer, Freddie Mac’s deputy chief economist. “The labor market keeps chugging along, as reflected in today’s June jobs report.”

Kiefer noted that the economy has added jobs for 93 consecutive months, and unemployment only rose as a result of gains in labor participation.

“This ongoing strength in jobs, coupled with the recent moderation in mortgage rates, might be enough for the housing market to shrug off the recent slump in home sales,” Kiefer said.

Fannie Mae Chief Economist Doug Duncan said the strong report should keep the Federal Reserve on course to raise interest rates two more times this year.  

"The June jobs report portrayed a strong labor market but at the same time signaled that the Fed’s gradual normalization of monetary policy remains appropriate," Duncan said.   

Sectors adding jobs included professional and business services (up 50,000 jobs); manufacturing (up 36,000); and health care (up 25,000). Notably, the construction industry added 13,000 in June, and has increased by 282,000 workers in a year.

National Association of Realtors Chief Economist Lawrence Yun said the uptick in labor participation should increase demand for homes, but also draw more people to the construction industry, which pays on average $27.56 per hour, about $5 more per hour than typical non-supervisory jobs.

"Part of the housing inventory shortage is due to the lack of construction workers," Yun said. "One encouraging aspect of the latest job report is the boost in the number of people seeking work. With more people entering the labor force and seeking work, some may turn to the higher-paying construction industry."

First American Chief Economist Mark Fleming said roughly 4,000 jobs were added in residential home construction. Labor shortages are frequently cited as a reason that builders are not producing more homes.   

“It indicates further increases in housing starts are likely and more housing supply may be on the way,” Fleming said. “It’s very hard to have one — housing starts — without the other, residential construction employment.”

Fannie Mae's Duncan, though, said that residential construction hiring was disappointing in June, down from roughly 12,600 jobs in May. This points to "little relief in the supply shortage that has been the main impediment to the housing market," according to Duncan.



 

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