Employment increased more than forecast in June, wages picked up and the U.S. jobless rate held close to a four-year low as the world’s largest economy weathered the effect of higher taxes and federal budget cuts.
Payrolls rose by 195,000 workers for a second straight month, the Labor Department reported today in Washington. The median forecast in a Bloomberg survey projected a 165,000 gain after a previously reported 175,000 increase in May. The jobless rate stayed at 7.6%, while hourly earnings in the year ended in June advanced by the most since July 2011.
Job gains and a rebound in housing are shoring up Americans’ finances and boosting expectations that the economy will gain momentum even after the payroll tax increased and government agencies began to cut spending. Federal Reserve policy makers have said they’ll start to trim bond purchases before the end of the year as unemployment falls.
“The job market’s as good as it was last month,” Drew Matus, deputy U.S. chief economist at UBS Securities LLC in Stamford, Connecticut, said before the report. “The labor market is going to continue to be a source of support for the U.S. economy both in terms of income and in terms of consumer willingness to spend.”
Forecasts of the 91 economists surveyed for June payrolls ranged from increases of 77,000 to 220,000. The Labor Department surveys businesses and households for the pay period that includes the 12th of the month.
Revisions to the prior two months’ payrolls reports added a total of 70,000 jobs to the employment count in April and May.
Retailers, professional and business services, health care and leisure and hospitality businesses led the payroll gains in June. Manufacturers cut jobs for a fourth straight month and government payrolls dropped.
The household survey, used to calculate the unemployment rate, showed that more people entered the labor force and most of them were able to find work.
At the same time, the report showed an increase in discouraged workers and in the number of people working part time who would prefer full-time employment.
Private payrolls, which don’t include government agencies, increased 202,000 in June after a 207,000 gain the prior month.
Factories reduced payrolls by 6,000 in June, while construction companies added 13,000, the most in three months, today’s report showed.
Today’s employment report also showed average hourly earnings rose 0.4% to $24.01 in June from the prior month. They were up 2.2% over the past 12 months.