The American economy, this month entering its seventh year of recovery, still has some legs: Employers in June added a solid 223,000 jobs across a broad spectrum of service industries.
But the Labor Department report Thursday, released a day earlier than usual because of the Fourth of July holiday, was not entirely glowing. Workers’ earnings, after a healthy increase in May that raised hopes of accelerating pay, were flat last month.
And a fall in the jobless rate to a new post-recession low of 5.3 percent, from 5.5 percent in May, came amid an exodus of workers.
Moreover, job growth for May and April was revised lower by a combined 60,000 jobs. That left the average monthly job growth for the second quarter at 221,000 – a good pace but down from 260,000 last year.
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Still, the latest employment report confirms that the economy firmed up after a sharp slowdown in the weather-marred first quarter. And it could give Federal Reserve officials a little more confidence in the economy as they consider whether to hike interest rates this September. At the same time, the persistent lack of wage gains for U.S. workers, plus the turmoil in Greece and weaker growth in China and elsewhere, is likely to give the central bank officials pause.
The hiring in June was just slightly lower than analysts’ forecasts. Economists had predicted that the jobless figure would drop to 5.4 percent, but it dropped more sharply as the labor force – those who have jobs and are looking for work – declined by 432,000 last month after an increase of similar magnitude in May, the Labor Department said.
Many experts have been looking for a slow uptick in the so-called labor participation rate as workers who dropped out of the job market during the recession return, but the number of people in the labor force as a share of the total working-age population fell by a big 0.3 percentage point, to 62.6 percent, last month. That was the lowest since October 1977.
More encouragingly, the number of long-term unemployed workers declined by 381,000 last month, to 2.1 million, although they still accounted for more than one-fourth of all officially jobless workers.
Job growth last month on the whole was impressive, with hiring spread across many industries, from lower-paying retail to higher-wage services such as engineering and computer design. The private sector has now added jobs for 64 straight months, the most since 1939.