The underemployment rate -- which includes part-time workers who’d prefer a full-time position and people who want to work but have given up looking -- rose to a four-month high of 14.3% from 13.8%.
Job gains and rising home values are shoring up Americans’ finances and boosting expectations that the economy is gaining steam.
Retailers added 37,100 jobs in June, with most of the increase coming from more hiring at motor vehicle dealerships and home-improvement outlets.
Automakers are one standout in the recovery, enjoying gains in sales fueled by improved confidence and cheap credit. New cars and trucks sold in June at the fastest pace since 2007 as American drivers replaced aging vehicles and a rebound in housing construction moved trucks off dealer lots. That helped new car sales beat estimates last month, giving a lift to General Motors Co. and Ford Motor Co. Brisk sales are boosting hiring at dealerships.
“We would take 10 sales people in a heartbeat,” said Don Hicks, owner of Shortline Auto Group in Aurora, Colorado, which employs about 150 people at four dealerships. “If they were available and trained, or trainable, we’d take another five or six technicians. It’s crazy trying to find people.”
Industry sales climbed to a 15.9 million annualized pace, exceeding the 15.5 million median estimate of economists surveyed by Bloomberg. That’s the best monthly pace since 16.1 million in November 2007 and compares to 14.3 million a year earlier, according to data from Ward’s Automotive Group.
“We’re a little island of prosperity,” Hicks said. “We’re leading the country out of recession.”
Other manufacturers aren’t doing as well as the recovery continues to struggle against crosscurrents. Americans are feeling the effects of a two percentage-point increase in the payroll tax that took effect in January and growth is being restrained by weakness overseas and federal budget cuts that began in March.
Financial markets also remain fragile after Fed Chairman Ben S. Bernanke said the central bank could start reducing its $85 billion in monthly bond purchases later this year and end the program in the mid-2014. Bernanke said last month he expects the jobless rate to be around 7% when the Fed stops buying bonds.
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