US economy adds 195,000 jobs
WASHINGTON (AP) – U.S. employers added a robust 195,000 jobs in June and many more in April and May than previously thought. The job growth suggests a stronger economy and means the Federal Reserve could slow its bond purchases as early as September.
The unemployment rate remained 7.6 percent because more people started looking for jobs – a healthy sign – and some didn’t find them. The government doesn’t count people as unemployed unless they’re looking for work.
The Labor Department’s report Friday pointed to a U.S. job market that’s showing surprising resilience in the face of tax increases, federal spending cuts and economic weakness overseas. Employers have added an average 202,000 jobs for the past six months, up from 180,000 in the previous six.
June’s job gain was fueled by consumer spending and the housing recovery. Consumer confidence has reached a 5 1/2 year high and is helping drive up sales of homes and cars. Hiring was especially strong in June among retailers, hotels, restaurants, construction companies and financial services firms.
“The numbers that we’re seeing are more sustainable than we thought,” said Paul Edelstein, U.S. economist at IHS Global Insight, a forecasting firm. “We’re seeing better job numbers, the stock market is increasing and home prices are rising.”
Pay also rose sharply last month and is outpacing inflation. Average hourly pay rose 10 cents to $24.01. Over the past 12 months, it’s risen 2.2 percent. Over the same period, consumer prices have increased 1.4 percent.
Stocks rose sharply in midafternoon trading. The Dow Jones industrial average was up about 130 points. And the yield on the 10-year Treasury note jumped from 2.56 percent to 2.72 percent, its highest level since August 2011. That’s a sign that investors think the economy is improving.