220,000 jobs added in June

U.S. re­port shows six in 10 adults em­ployed; job­less rate rises to 4.4 per­cent.

Northwest Arkansas Democrat-Gazette - - FRONT PAGE - In­for­ma­tion for this ar­ti­cle was con­trib­uted by Josh Boak of The As­so­ci­ated Press and Ana Swan­son of The Wash­ing­ton Post.

CHRISTO­PHER S. RU­GABER

WASH­ING­TON — U.S. em­ploy­ers added 222,000 jobs in June, the most in four months, a sign to econ­o­mists that 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, only 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 un­em­ploy­ment rate rose be­cause more Amer­i­cans be­gan look­ing for work and not all of them found it.

“We’ve been cre­at­ing close to 200,000 jobs a month now for more than seven years. That’s just an in­cred­i­ble achieve­ment. And that ma­chine is still hum­ming,” said Mark Zandi, chief econ­o­mist at Moody’s An­a­lyt­ics.

Fri­day’s jobs re­port from the gov­ern­ment 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’s still enough to draw in peo­ple who had pre­vi­ously 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.

“This month’s ro­bust job creation and mod­er­ate wage growth has di­rect im­pact on Amer­i­can fam­i­lies,” Alexan-

der Acosta, the U.S. sec­re­tary of la­bor, said in a state­ment Fri­day morn­ing. “We are com­mit­ted to un­leash­ing the eco­nomic power of the Amer­i­can peo­ple so ev­ery cit­i­zen has the abil­ity to reach his or her full po­ten­tial.”

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 that eco­nomic growth should be de­cent, if not ro­bust, through 2017, said John Sil­via, chief econ­o­mist at Wells Fargo.

“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 ar­rives 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 that 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 that 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 from the re­ces­sion.

In a re­port to Congress on Fri­day, the Fed said its pol­i­cy­mak­ers ex­pect to raise short­term 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.

Many work­ers are too cau­tious to push for raises, Moody’s chief econ­o­mist Zandi said, partly be­cause of the lin­ger­ing im­pact of the re­ces­sion, when nearly 9 mil­lion peo­ple lost jobs.

And some busi­nesses have de­cided they can’t raise prices enough to af­ford mean­ing­ful pay raises. That cy­cle of lim­ited wage gains and low prices has kept in­fla­tion in check, to the con­ster­na­tion of the Fed, which wants to see slightly higher in­fla­tion to jus­tify its cam­paign to raise short-term rates.

Still, many busi­ness own­ers

are see­ing greater con­fi­dence among their cus­tomers. Mark Dix, a gen­eral con­trac­tor in Knoxville, Tenn., said he has seen a jump in de­mand for the ren­o­va­tion, paint­ing and home con­struc­tion ser­vices he pro­vides. He em­ploys 15 peo­ple.

“We’re see­ing a boom in peo­ple who are will­ing to take out a loan and build a home,” he said. “I would hire an­other half-dozen peo­ple to­day if I could find the skilled la­bor.”

Drug use is a prob­lem among many peo­ple he con­sid­ers for jobs, Dix said. And many men in the area rely on dis­abil­ity ben­e­fits, he added.

The June jobs re­port showed broad hir­ing across nu­mer­ous in­dus­tries. Health care posted the big­gest job gain — 59,100 — de­spite un­cer­tainty around health care leg­is­la­tion in Congress. Gov­ern­ments added an un­usu­ally high 35,000 po­si­tions, nearly all of them at the lo­cal level. Con­struc­tion com­pa­nies added 16,000, and min­ing, which in­cludes oil and gas drilling, gained 8,000.

AP/ALAN DIAZ

A con­struc­tion worker builds a con­do­minium com­plex in Coral Gables, Fla., ear­lier this week. The new La­bor De­part­ment re­port said con­struc­tion com­pa­nies added 16,000 jobs in June.

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