Home / Columns and Features / In strong hiring, U.S. employers add 222,000 jobs; jobless rate at 4.4%

In strong hiring, U.S. employers add 222,000 jobs; jobless rate at 4.4%

U.S. employers added a robust 222,000 jobs in June, the most in four months, a reassuring sign businesses may be confident enough to keep hiring despite a slow-growing economy.

The government also revised up its estimate of job growth for April and May by a combined 47,000. Hiring has averaged nearly 180,000 jobs a month this year, slightly below last year’s pace. The unemployment rate for June ticked up to 4.4 percent from 4.3 percent in May, a 16-year low. The jobless rate rose because more Americans began looking for work and not all of them found it.

Last Friday’s jobs report suggested that after eight years of a grinding but resilient recovery, companies still have room to hire at a healthy pace. Though the rate of job growth has slowed since 2014 and 2015, it is still enough to draw in people who had stopped looking for work. The proportion of adults with jobs has reached 60.1 percent, just below April’s figure, which was the highest since the recession ended in 2009.

The steadfast hiring could benefit President Donald Trump. Economists have raised concern that growth under Trump could begin to falter as the economic recovery enters its ninth year — the third-longest since World War II. So far, the job market and economy look broadly the same as they did last year, though Trump has boasted that his policies are accelerating hiring and growth.

Even with June’s strong hiring, average hourly pay rose just 2.5 percent from a year earlier, below the 3.5 percent typical of a healthy economy. Employers in many industries remain reluctant to raise pay.

The numbers signal economic growth should be decent, if not robust, through 2017, said John Silvia, chief economist at Wells Fargo & Co.

“It’s a good report for the economy,” he said. “It really does say that we’ve got 2 percent-plus growth for the second half of the year.”

The jobs report arrived against the backdrop of an overall mixed picture of the U.S. economy.

Home sales are chugging along, though a shortage of properties for sale suggests the pace of purchases could flag. And auto sales are slowing from last year’s record pace, causing some automakers to cut jobs.

At the same time, surveys of manufacturing and service companies indicate growth in both sectors may be accelerating. Factory activity is expanding at the fastest pace in three years, the Institute of Supply Management, a trade group of purchasing managers, found.

The economy grew at just a 1.4 percent annual rate in the first three months of 2017, below even the sluggish 2 percent average pace in the eight years since the recession ended. But most economists have forecast that growth rebounded in the April-June quarter to an annual rate of 2.5 percent or higher.

Still, the economy appears resilient enough for the Federal Reserve to keep raising its benchmark interest rate. The Fed has signaled its belief that the economy is on firm footing as it enters its ninth year of recovery.

In a report to Congress on Friday, the Fed said its policymakers expect to raise short-term rates once more this year and three times in 2018.

Consumers have expressed confidence in the economy and, accordingly, are spending more than they did in the first three months of the year.

Businesses advertised 6 million open jobs in May, a record high, which suggests that they are struggling to find the workers they need. Normally, as the number of unemployed dwindles, employers raise pay to attract job seekers.

Yet the influx of job seekers last month might have offset some upward wage pressures. Employers had more applicants to choose from.

Mark Zandi, chief economist at Moody’s Analytics, said many workers are too cautious to push for raises, partly because of the lingering impact of the Great Recession.

And some businesses have decided they cannot raise prices enough to afford meaningful pay raises.

Christopher S. Rugaber is an Associated Press economics writer.

(c) 2017 Rochester Business Journal. To obtain permission to reprint this article, call 585-363-7269 or email madams@bridgetowermedia.com.

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