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“The June report is another solid, unspectacular episode,” Douglas Holtz-Eakin, a former director of the Congressional Budget Office, told MarketWatch. “The jobs picture shows a trend in the vicinity of 145,000 monthly, but wage growth once again disappoints. It is strong enough to justify a Fed rate increase, but the absence of wage inflation will likely give it reasons to hold steady again in July.”
Average hourly earnings increased by 2 cents an hour in June, after increasing 6 cents in May. Earnings have increased 2.6 percent over the course of the year, according to the Bureau of Labor Statistics. The PayScale Index, which tracks the change in wages of employed U.S. workers, forecasts a 1.6 percent year-over-year increase in pay for the third quarter of 2016.
Behind the Unemployment Rate
The number of newly unemployed workers rose last month; the tally of persons unemployed for five weeks or less increased by 211,000. The number of long-term unemployed (those out of work for 27 weeks or more) remained largely unchanged at 2 million. The long-term unemployed make up more than a quarter of all unemployed workers.
The labor force participation rate (62.7 percent), and the employment-population ratio (59.6 percent) remained flat for June, while the number of involuntary part-time workers decreased by 587,000 to 5.8 million.
The number of marginally attached workers, 1.8 million, was unchanged from a year earlier. However, there were 151,000 fewer discouraged workers (those not looking for work, because they believe there are no jobs for them) last month than the year before. In total, there were 502,000 discouraged workers in June.
The Service-Providing Sector Leads Gains, Again
Mining continued its decline last month, shedding 6,000 jobs. Construction and manufacturing were little changed in June, as were wholesale trade, transportation and warehousing, and government.
The largest gains were in the service-providing sector: leisure and hospitality added 59,000 jobs, healthcare and social assistance added 58,000 jobs, and business and professional services added 38,000 jobs.
Information boosted payrolls by 44,000 jobs, with 28,000 jobs added in telecommunications, largely due to Verizon workers returning from their strike.
Retail trade added 30,000 jobs last month, after remaining flat for the previous two months. Financial activities added 16,000 jobs in June.
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