US employers added 223,000 jobs in June, down from a revised figure of 254,000 in the previous month, according to data from the Bureau of Labor Statistics.
The unemployment rate fell to 5.3 per cent from 5.5 per cent in May, the lowest rate since April 2008. Job gains for April and May were revised down by a total of 60,000.
The decline in joblessness was mostly due to the fall in the labour-force participation rate, the proportion of adults who are either working or actively looking for a job. 432,000 Americans dropped from the labour force, pushing the labour-force participation rate down from 62.9 per cent in May to 62.6 per cent, the lowest level since 1977.
The encouraging sign in the June job gains report was the drop in the number of Americans out of work for 27 weeks or more. The pool of the so-called long-term unemployed dropped by 381,000 to 2.1 million. Those individuals accounted for 25.8 per cent of the unemployed, down from 28.6 per cent in the previous month.
The number of Americans working part-time for economic rather than personal reasons fell by 147,000 to 6.5 million.
The US economy is approaching full employment, though there are scant signs of wage pressures. Average hourly earnings were unchanged, at 24.95 dollars. Hourly payments were up just 2 per cent over the past year. No pressure on wages means that there is no pressure on prices. The fed funds rate has been at near zero levels since 2008, but inflation is well below the central bank’s 2 per cent target.
Professional and business services added 64,000 jobs. Health care and social assistance added 52,800 jobs. Retailers hired 32,900 workers. Employment in the leisure and hospitality sector rose by 22,000. Transportation and warehousing put on 17,100 positions. Construction payrolls were unchanged. Employment in the mining and logging sector, which includes oil and gas companies, fell by 3,000, although that was down from the fall of 18,000 in the previous month and 14,000 in April.
America’s gross domestic product fell at a 0.2 per cent annual pace in the first quarter, a result of temporary factors such as the freezing weather and a port strike on the west coast, but also a decline in oil investment and a strong dollar, which slowed export growth. Personal consumption rose 2.1 per cent, down from a 4.4 per cent increase in the final quarter of 2014. Non-residential fix investment declined 2 per cent, in contrast to an increase of 4.7 per cent in the fourth quarter of 2014. Exports of goods and services were down 5.9 per cent.
The US economy, however, has recently shown a sign of rebounding. Consumer spending, the linchpin of economic growth, rose 0.9 per cent in May from a month earlier, the strongest rise since August 2009. Consumers’ incomes increased 0.5 per cent, the same as in April.
Photo: MTA Capital Construction / Rehema Trimiew
