Nonfarm payrolls increased by rose by 213,000 jobs last month, the Labor Department said on Friday. Data for April and May was revised to show 37,000 more jobs created than previously reported. The economy needs to create roughly 120,000 jobs per month to keep up with growth in the working-age population.
The unemployment rate rose to 4.0 percent from an 18-year low of 3.8 percent in June as more people entered the labor force in the sign of confidence in the jobs market.
The labor force participation rate, or the proportion of working-age Americans who have a job or are looking for one, rose to 62.9 percent last month from 62.7 percent in May. It had declined for three straight months.
Average hourly earnings rose five cents, or 0.2 percent in June after increasing 0.3 percent in May. That kept the annual increase in average hourly earnings at 2.7 percent.
The moderate wage growth should allay fears of a strong build-up in inflation pressures. The Fed’s preferred inflation measure hit the central bank’s 2 percent target in May for the first time in six years.
Minutes of the Fed’s June 12-13 policy meeting published on Thursday offered an upbeat assessment of the labor market. The U.S. central bank increased interest rates last month for the second time this year and has projected two more rate hikes by year end.
With a record 6.7 million unfilled jobs in April, economists are optimistic that wage growth will accelerate later this year.
Economists polled by Reuters had forecast nonfarm payrolls increasing by 195,000 jobs last month and the unemployment rate steady at 3.8 percent. The employment report added to data such as consumer spending and trade that have suggested a sharp acceleration in economic growth in the second quarter.
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