Job market gains steam; unemployment rate drops to 6.1%
A robust employment report for June underscored growing confidence about the strength of the recovery but raised concern that the labor market might sway the Federal Reserve to raise interest rates sooner than anticipated.
In June, employers added 288,000 jobs, and the unemployment rate, which is derived from a separate survey of households, declined by 0.2 percentage points to 6.1 percent, its lowest since September 2008, the Department of Labor said on Thursday.
It was the fifth-consecutive month that job growth has topped 200,000 — the best stretch since the technology boom of the late 1990s — and gains were widespread, led by professional and business services, retail, restaurants and health care.
“It looks very good, broad-based job growth,” said Gus Faucher, a PNC Bank economist. “There's really not a lot of negative to take from this one.”
Confidence has been on the rise as many signs point to the slow first quarter as the product of a tough winter, not a crumbling recovery. The number of people who stopped looking for work out of frustration fell 21,000 from the previous month and 351,000 from a year ago, the Labor Department said. The University of Michigan's index of consumer sentiment increased to 82.5 from 81.9 in May.
The long-term unemployed, people jobless for more than 27 weeks, declined by 293,000 to 3.1 million. Companies seem willing to reach further for workers who have been unemployed and are hiring more people without a college education.
The jobless rate among high school grads 25 and older declined significantly, from 6.5 percent in May to 5.8 percent. That suggests an openness to hiring lower-skilled workers and offering job training.
“It indicates that the economy is getting strong enough that it's pulling more people in,” said George Mokrzan, director of economics at Huntington National Bank in Columbus.
The proportion of working-age adults who hold a job or are looking for one, known as labor force participation, remained unchanged at 62.8 percent, leveling off after years of decline.
Labor participation needs to climb higher to get back to a healthy market, economists said. But the leveling off was still a good sign.
The Fed is expected to keep tapering its monthly bond purchases and to hold its short-term interest rate near historic lows through at least mid-2015.
Fed Chair Janet Yellen has said policymakers are in no rush to raise interest rates, though the central bank has said it could increase rates once joblessness hit 6.5 percent.
The Fed kept its course last month when the May report showed a gain of 217,000 jobs — revised to 224,000 on Thursday.
That could change with another few months of strong jobs reports, Mokrzan said. He didn't perceive raising the target Fed funds rate as a bad thing, though, as long as it didn't exceed a quarter of a percentage point increase.
Other economists doubted the Fed would alter course.
The Fed Board has shifted to a more complex reading of labor market health beyond the unemployment rate, looking at the long-term unemployed and wage growth, among a dozen or so measures, said Richard Hoey, Bank of New York Mellon chief economist.
Hourly wages rose just 2 percent in the past year.
The job market is expanding, but so has the population of working-age adults. Many of the added jobs just maintain employment levels, said Heidi Shierholz, an economist at the Economic Policy Institute.
“We're in such a big hole, even if we maintain that (288,000 job growth) pace every single month from here on out, it would take 2 1⁄2 years to get back to pre-Recession labor market conditions,” she said.
Chris Fleisher is a staff writer for Trib Total Media.
Subscribe today! Click here for our subscription offers.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Marcellus driller Vantage Energy to pay nearly $1M for Greene County well problems
- 2 states, 2 different conclusions about fracking
- Energy sector adjusts to global oil plummet
- Real estate union: Howard Hanna buys Langholz Wilson Ellis
- ExOne Co. moves solidify authority under CEO
- Peet’s Coffee & Tea closes its 3 Pittsburgh stores
- EPA says it won’t regulate coal ash as hazardous waste
- Treasury turns profit as it exits GM bailout
- Western Pa. utility workers OK contract with FirstEnergy
- ‘Cause for Paws’ telethon helps dogs find homes
- Kim Komando: Can you get a virus on your smartphone?