U. S. employers add 195,000 jobs to economy

WASHINGTON — U.S. employers added a robust 195,000 jobs in June and many more in April and May than previously thought. The job growth suggests a stronger economy and makes it more likely the Federal Reserve will slow its bond purchases as early as September.

The unemployment rate remained 7.6 percent because more people started looking for jobs — a healthy sign — and some didn't find them. The government doesn't count people as unemployed unless they're looking for work.

The U.S. job market is showing surprising strength and resilience in the face of tax increases, federal spending cuts and economic weakness overseas. Employers have added an average 202,000 jobs for the past six months, up from 180,000 in the previous six.

June's job gain was fueled by consumer spending and the housing recovery. Hiring was especially strong among retailers, hotels, restaurants, construction companies and financial services firms.

"The numbers that we're seeing are more sustainable than we thought," said Paul Edelstein, U.S. economist at IHS Global Insight, a forecasting firm. "We're seeing better job numbers, the stock market is increasing and home prices are rising."

Pay also rose sharply last month and is outpacing inflation, the Labor Department's monthly jobs report Friday showed. Average hourly pay rose 10 cents in June to $24.01. Over the past 12 months, it's risen 2.2 percent. Over the same period, consumer prices have increased 1.4 percent.

Stocks rose sharply in early afternoon trading. The Dow Jones industrial average was up 85 points. And the yield on the 10-year Treasury note jumped from 2.56 percent to 2.71 percent, its highest level since August 2011. That's a sign that investors think the economy is improving.

Friday's report showed the economy added 70,000 more jobs in April and May than the government had previously estimated — 50,000 in April and 20,000 in May.

Further job growth could lower the unemployment rate and help the economy rebound after a weak start this year. If so, the Fed would likely scale back its bond purchases before the year ends.

The Fed has been buying $85 billion worth of Treasury and mortgage bonds a month since late last year. The purchases pushed long-term rates to historic lows, fueled a record-breaking stock market rally and encouraged consumers and businesses to borrow and spend. They've also helped support an economy that's had to absorb federal spending cuts and a Social Security tax increase that's reduced consumer paychecks this year.

Friday's report contained one element of concern: Many of the job gains were in generally lower-paying industries, a trend that emerged earlier this year. The hotels, restaurants and entertainment industry added 75,000 jobs in June. This industry has added an average of 55,000 jobs a month this year, nearly double its 30,000 average in 2012. Retailers added 37,000. Temporary jobs rose 10,000.

The health care industry added 20,000 and construction 13,000. But manufacturing shed 6,000.

Many of the new jobs were part time. The number of Americans who said they were working part time but would prefer full-time work jumped 322,000 to 8.2 million — the most in eight months.

Last month's job growth came solely from the private sector, particularly services firms. Government jobs fell 7,000, mostly at the federal level. The federal government has shed 65,000 jobs in the past 12 months. Some of that decline likely reflects the federal budget cuts that kicked in March 1.

Declining government employment has been a drag on the job market since the recession ended four years ago. In a typical recovery, governments typically add at least 20,000 jobs a month.

Solid hiring in the private sector is pushing up wages, even in some lower-paying industries. Average hourly wages for retail employees rose 6 cents in June to $16.64 and have risen nearly 2 percent in the past year.

The overall increase in pay is "the standout feature of this report," said Ryan Sweet, an economist at Moody's Analytics. The low inflation rate also helps consumers, he noted.

"The tide is continuing to turn for the consumer," Sweet said. "The consumer is going to continue to be able to shoulder this recovery."

The unemployment rate is derived from a survey of households, which found that 177,000 more people started looking for jobs in June. Most found them. The increase suggests that Americans think their job prospects have brightened.

But because some of the job seekers didn't find work right away, the number of unemployed was largely unchanged at 11.8 million.

The 195,000 job gain for June is calculated from a separate survey of employers.

The percentage of Americans either working or actively looking for work rose for a second straight month to 63.5 percent. This is known as the "labor force participation rate." The participation rate has been generally declining since peaking at 67.3 percent in 2000. That's partly the result of baby boomers retiring and leaving the workforce.

Despite the solid pace of hiring in June, the economy is growing only sluggishly. It expanded at a 1.8 percent annual rate in the January-March quarter. Most analysts expect growth at roughly the same subpar rate in the April-June quarter.

Weak economies overseas cut demand for U.S. exports in May. That led some economists to predict that growth in the second quarter might be slower than forecast.

Still, many areas of the economy are improving. The Fed's low-rate policies have led more Americans to buy homes and cars. They also helped boost stock and home prices in the first half of the year, increasing wealth and lifting consumers' confidence to its highest level in 5½ years.

Auto sales in the January-June period topped 7.8 million, their best first half since 2007, according to Autodata Corp. and Ward's AutoInfoBank. Sales of previously occupied homes exceeded 5 million in May, the first time that's happened since November 2009. New-home sales rose at their fastest pace in five years.

Though fewer exports have hurt manufacturing, factories fielded more orders in May. And a measure of business investment rose for a third straight month.

Diane Swonk, chief economist at Mesirow Financial, said she thinks the improving job market will lead the Fed to taper its monthly bond purchases starting in September from $85 billion to $65 billion. She predicts the Fed will reduce its monthly purchases by an additional $20 billion in December.

Swonk said she thinks the Fed will end its bond buying altogether in the second half of 2014.

AP Business Writer Martin Crutsinger contributed to this report.

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Comments

CLAIRE GAMACHE's picture

Statistics

When people tell you that a certain statistic tells you the number of people looking for work that is not a shell game. It is what they say it is. It only becomes a shell game when people want to spin statistics to say things other than what they really are. Normally I am not in favor of cutting government benefits but in this case I think cutting extended unemployment benefits is probably a good idea. The long term unemployed are mostly older workers with outdated skills or poor health or work histories. They need a different kind of benefit that will help them to update their skills and show them how to go about finding a job and motivate them to do it or to get disability benefits. As they say "Don't shoot the messenger".

JERRY ARIPEZ's picture

Claire save your time

No matter what you ever give that chump for facts, or statistics, he poo poos it that it is not good enough since it came from a source that he doesn't want to look at..

Save your breath, the guy is moron...

Bob White's picture

Well Jerry if someone doesn't

Well Jerry if someone doesn't agree with your thinking you go to insulting....interesting Some would call that bullying. Aren't you the one that cries about how the Governor was a bully? Well I would have to say you had to be one of these two people. One you were a little mommies boy which when somebody didn't give you your little doll you would run to mommy and cry so she would get the doll for you OR you would walk around like you were King S#@* and bully everyone around. My money is on option 1 I'm guessing you were a bit of a sissy and now that your grown up and you can stand behind your key board and act tough. I will stop putting my comments up so you can have proverbial "dolly"

Bob White's picture

I don't get it can you

I don't get it can you explain?

Bob White's picture

The long term unemployed are

The long term unemployed are mostly older workers with outdated skills or poor health or work histories. Where are the stats on that? The only way you would say it was a shell game is if a Democrat would have told you.

Bob White's picture

"The Labor Department said

"The Labor Department said Friday that the economy also added 20,000 more jobs in May and 50,000 more in April than initially reported. The unemployment rate stayed at 7.6 percent, but for a good reason: More people started looking for work. The government counts people as unemployed only if they are searching for jobs." Well seems like a shell game to me they only report numbers when their are enough numbers to show it moving in the right directing. If use this way of thinking then what was the real unemployment number? If you normally work and your out of work whether your looking for work or not you should be counted don't need to play games. Seems to be easy to mess with the numbers and use them the way you want.
Jerry I'm not really sure what the Bush numbers have to do with the month of June 2013 I think if you check he left office in 2008 so I don't think he had any effect on those numbers. If your just trying to dig up not so impressive numbers or even lies You can start with this Presidential Administration that we have now so you can be more relevant in your comments.

JERRY ARIPEZ's picture

All Current information from many others....from AP, Fm BLS,etc

http://www.wcpo.com/dpp/money/us-economy-adds-195000-jobs-jobless-rate-s...

http://www.myfoxmemphis.com/story/22766166/us-economy-adds-195k-jobs-job...

http://www.bls.gov/news.release/pdf/empsit.pdf

http://www.ajc.com/news/ap/labor/us-economy-adds-195k-jobs-jobless-rate-...

NO NUMBERS MADE UP.......check the sources.....

Bush had nothing, nada, any progress in jobs in this 7 years, as what this current administration has done UNDER a Recession with more jobs created and a better economy in growth and GDP and the STOCK MARKET....

Bob White's picture

Not really sure of the

Not really sure of the relevance of your last comment if you read my last comment I tried to explain to you that President Bush left office in 2008 so not sure how that effects June 2013 numbers. I will say the deficit has more than doubled in the last 5 years can you speak on that and please don't try to blame it on someone that isn't in town anymore. Please try to stay up to date.

JERRY ARIPEZ's picture

Over your head again, the relevance was your first question...

Not blaming Bush, the guy out of town????? Just providing the contrast...what Bush did in comparisons to the topic JOB GROWTH, ECONOMY...back your your first over the top comment.....

Again it says, reread it 2007....Bush, 7 years, It goes to your original comment that you stated:"Wow how can they say the economy is moving when the unemployment stays the same?"

I gave you the answers to your question? I provided you answers to your question....stay focused.....

Look at the graphs, look at the links, LOOK....
---------------------
I did not say anything about the deficit, you are deflecting the discussion...

But since you want the answers for that here you go....

http://www.youtube.com/watch?feature=player_embedded&v=LcvLHHMC4iI

Bob White's picture

I think your trying to

I think your trying to deflect with the Busch comments

JERRY ARIPEZ's picture

Don't think...

You only confuse yourself....whatever you do, don't get into an argument with yourself, you will lose every time...

Bob White's picture

If only you were half as

If only you were half as smart as you thought you were. Just because you say it or you put up a left sided link doesn't make it true. Captain Deflection.

JERRY ARIPEZ's picture

Perfect reason;

Why we should not waste our time with you. We provide you links and even the BLS Bureau of Labor Statistics is left sided for you.
THEY ARE CALLED FACTS.....not my words....read you bible that has some good fairy tales for you too....

All what I put up was all links, charts with hardly any of my own words and in your little mind it was all concocted to make you dizzy, well you make yourself dizzy.

You should put some more air in those tires on your house to level and balance it out, since you are always leaning so far to the right to have any type of equilibrium on any thing that is said to you, unless YOU Wrote it...Right....

So what you always say then according to your comments are all with merit and truth and no spin, HUH! You have no conceit in your family, you have it all.......now you talk about deflection and making it true in your own mind..

Don't waste our time....A sharp tongue is no indication of a keen mind, remember that as you layout more of your BS....read you bible that has some good fairy tales for you to...prepare for those angels swinging swords and blowing their horns.....

Bob White's picture

Their you go again.

Their you go again.

JERRY ARIPEZ's picture

Get an education

It is spelled THERE....

JERRY ARIPEZ's picture

CREATED PER MONTH BY THE BUSH ADMINISTRATION: 20,000

The Labor Department said Friday that the economy also added 20,000 more jobs in May and 50,000 more in April than initially reported. The unemployment rate stayed at 7.6 percent, but for a good reason: More people started looking for work. The government counts people as unemployed only if they are searching for jobs.

Americans' paychecks rose at a healthy pace and have outpaced inflation in the past year. Average hourly pay increased 10 cents to $24.01. That's 2.2 percent higher than a year ago. Over the 12 months ending in May, consumer prices rose 1.4 percent.

Stock index futures rose shortly after the report was released at 8:30 a.m. EDT. And the yield on the 10-year Treasury note jumped from 2.56 percent to 2.65 percent, a sign that investors think the economy is improving.

AVERAGE NUMBER OF JOBS CREATED PER MONTH BY THE BUSH ADMINISTRATION: 20,000

AVERAGE NUMBER OF JOBS CREATED PER MONTH BY THE BUSH ADMINISTRATION EXCLUDING THE DISASTROUS LAST YEAR: 65,000

NUMBER OF MONTHS IN THE BUSH ADMINISTRATION IN WHICH THERE WERE 500,000 OR MORE JOBS CREATED: 0.

(In fact, there were no months in the Bush Administration in which there were 400,000 jobs created).

Source: The BLS

Read more: http://www.businessinsider.com/number-of-jobs-created-per-month-by-georg...

JERRY ARIPEZ's picture

Stock market climbs to all-time highs on upbeat jobs figures

Stock market climbs to all-time highs on upbeat jobs figures

The unemployment rate falls to the lowest level in four years, giving investors new confidence after weeks of conflicting signals about the strength of the global economy.

http://www.pressherald.com/news/Dow-crosses-5000-for-first-time-on-hirin...

"You have an environment of modest growth, stable inflation, which sends a signal that the Fed is going to keep doing what it's doing," said Michael Gapen, director of U.S. economic research at Barclays. "The outlook still looks favorable for equities."

JERRY ARIPEZ's picture

15 Charts That Will Restore Your Faith In The American Economy

15 Charts That Will Restore Your Faith In The American Economy

http://www.huffingtonpost.com/2013/07/04/charts_n_3546334.html

Bob White's picture

Wow how can they say the

Wow how can they say the economy is moving when the unemployment stays the same? It kind of sounds like a shell game to me. I guess like some people on here think if you say it enough maybe people will believe it.

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