One day after announcing that unemployment claims rose for the third straight week, the Labor Department announced that job growth surged past expectations in June. The latest figures from the Bureau of Labor Statistics showed that non-farm payroll jobs reached 222,000 last month, well past the expected gain of 180,000.
The Labor Department credited increased worker hours for the surge. The average workweek increased from 34.4 to 34.5 hours per week from may to June. Employment increased in health care (up 37,000 jobs), social assistance (up 23,000), financial activities (up 17,000), and mining (up 8,000).
Employment in other major industries, including construction, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, and government, however, showed little change over the month.
Curt Long, chief economist at the National Association of Federally-Insured Credit Unions (NAFCU), reminded that while the growth in jobs is great news, “wage growth has stalled, which will add to fears that low inflation may not improve any time soon.”
Average hourly earnings increased four cents, just 0.2 percent, in June, to $26.25. That’s better than the 0.1 percent gain in May, though not by much. However, year-over-year, the average hourly wage was up 2.5 percent in June, or 63 cents an hour. Than compares to an uptick of 2.4 percent in May. In June, average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents to $22.03.
The latest numbers showed divisions among Fed officials over how great a concern sluggish wage growth actually is, Long said. “While we may see the Fed trimming its balance sheet later this year, another rate hike is looking less likely."
Also causing some consternation among economists is the unusually low unemployment picture. In May, unemployment hi a 16-year low at 4.3 percent. In June that number crept upwards to 4.4 percent. While that could signal greater confidence in the labor market, it could also be an artificial optimism in that more people are simply looking for work.
The number of long-term unemployed (those jobless for 27 weeks or more) was unchanged at 1.7 million in June. Long-term unemployed accounted for 24.3 percent of all unemployed. Over the year, the number of long-term unemployed was down by 322,000.