U.S. economy adds 220,000 jobs in June, 40,000 above Wall Street forecasts

by Wesley Brown ([email protected]) 397 views 

The U.S. job market added 40,000 more jobs to the U.S. economy than expected as new hires, part-time and marginally attached workers continue to enter the labor pool seeking gainful employment in the fast-growing service sector.

Total nonfarm payroll employment in June increased by 222,000 in June, and the unemployment rate was little changed at 4.4% as jobs were added in the health care, social assistance, financial activities and mining sectors, the U.S. Bureau of Labor Statistics reported Friday (July 7).

The nation’s robust jobs report from the U.S. Labor Department easily beat Wall Street’s forecast that predicted the U.S. economy to would add a mere 179,000 jobs in June, easily ahead of the 138,000 “soft” job market in May and one uptick higher than the jobless rate of 4.3%.

The better-than-expected jobs is a pleasant surprise for the Trump administration, which saw the nation’s jobless rate fall to its lowest level in nearly a decade in April and May as private sector employment stabilized the U.S. labor market.

In Thursday’s ADP National Employment Report, private sector employment increased by 158,000 jobs from May to June. The monthly report, which is derived from ADP’s payroll data that measures the change in total nonfarm private employment each month on a seasonally-adjusted basis, continues the ongoing trend of strong service sector growth in professional and business services, healthcare, education, financial activities and tourism.

“Despite a slight moderation in the month of June, the labor market remains strong,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “For the month of June, jobs were primarily created in the service-providing sector.”

Mark Zandi, chief economist of Moody’s Analytics, added, “The job market continues to power forward. Abstracting from the monthly ups and downs, job growth remains a stalwart between 150,000 and 200,000.  At this pace, which is double the rate of labor force growth, the tight labor market will continue getting tighter.”

More than two weeks ago, Arkansas’ jobless rate touched a fifth straight all-time low in May at 3.4%, sliding a full percentage point below the U.S. unemployment rate as the number of employed added 19,003 workers to reach employment of 1.309 million.

Nationwide, the number of unemployed persons held at about 7 million and labor force participation, at 62.8%, continued to show no clear trend over the past year. Since January, the unemployment rate and the number of unemployed are down by 0.4 percentage point and 658,000, respectively.

Among the major worker groups, the unemployment rate for adult men held at 4% in April. The jobless rates for adult women (4.1%), teenagers (13.3%), Whites (3.8%), Blacks (7.1%), Asians (3.6%), and Hispanics (4.8%) showed little change. The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged at 1.7 million in June and was 24.2% of the unemployed. Over the year, the number of long-term unemployed was down by 322,000.

Incorporating revisions for April and May, which increased nonfarm payroll employment by 47,000, monthly job gains have averaged 194,000 over the past 3 months, BLS officials said. In June, health care employment rose by 37,000 as job gains occurred in ambulatory health care services and hospitals. Altogether, job growth in health care has averaged 24,000 per month for the first half of 2017, compared with an average monthly gain of 32,000 in 2016.

The social assistance industry added 23,000 jobs in June and has added 115,000 jobs over the year. Monthly employment in financial activities rose by 17,000, with a gain in securities, commodity contracts and investments. Financial activities have added a strong 169,000 jobs over the past 12 months, U.S. Labor officials said.

The nation’s recovering mining sector, which includes the oil and gas industry, saw a robust gain of 8,000 new jobs in June. Since reaching a low point last October, mining has added 56,000 jobs with most of the gain in support activities for the U.S. shale production.

June employment in professional and business services, which has seen strong gains in Arkansas, continued to trend up in June with 35,000 total job adds to 624,000 total over the past year. Job growth in food services and drinking places also continued to trend up over the month with 29,000 new positions. Job gains have averaged 26,000 per month thus far in 2017, in line monthly job gains in 2016.

In other major industries, including construction, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, and government, there was little change over the month, Labor Department officials said.

The “U-6” jobless rate, which includes those “marginally” attached to the labor force and person employed part-time but seek full-time work, was 8.6%, up from 8.4% in May and the same as in April. Some economists point to the U-6 number as a better measure of the economy with respect to jobs.

Among the marginally attached, there were 514,000 discouraged workers in June who were not looking for work because they believe no jobs are available for them, BLS data shows. The remaining 1.1 million persons marginally attached to the labor force in June had not searched for work for reasons such as school attendance or family responsibilities.

Average hourly earnings of all employees on private nonfarm payrolls increased by 4 cents to $26.25 in June. Over the past 12 months, average hourly earnings have risen by 2.5%.