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Report Shows 288,000 New Jobs In June
RENEE MONTAGNE, HOST:
This is MORNING EDITION from NPR News. I'm Renee Montagne.
DAVID GREENE, HOST:
And I'm David Greene. Good morning. We begin this hour with more positive signs about the nation's economy. The Labor Department this morning said the U.S. unemployment rate fell to its lowest level in nearly six years last month, and employers added some 288,000 jobs to their payrolls. Here's NPR's Jim Zarroli.
JIM ZARROLI, BYLINE: The job growth was spread across the economy in business services, retail trade, manufacturing and even government hiring. Not only did June job growth go up at a robust pace, but the Labor Department also raised its estimate of the number of jobs created in April and May. Douglas Handler is chief U.S. economist at IHS Global Insight.
DOUGLAS HANDLER: We've averaged about 248,000 over the past five months, and then this month, the quality of the jobs really is noteworthy in the report. So we're on our way to labor market health for sure.
ZARROLI: The report also said that the overall unemployment rate fell again, from 6.3 percent in May to 6.1 percent. That was the lowest it's been since September 2008, the month when Lehman Brothers collapsed and the U.S. economy went into a tailspin. In recent years, such a big drop often took place for the wrong reasons. People grew so discouraged about finding work that they stop looking and fell off the unemployment rolls. But Ryan Sweet of Moody's Analytics says that wasn't the case this time. Household employment actually rose, and the overall labor participation rate was stable.
RYAN SWEET: It seems like people were getting - re-engaging back into the labor force. So I think the job and unemployment rate is encouraging. I think the jobless rate has come down much more quickly than many economists anticipated.
ZARROLI: At the same time, people who have had the most trouble finding jobs are finally getting hired. The number of long-term unemployed is dropping, too and is now half what it was three years ago. The report suggests that the big dip in growth last winter, when the U.S. economy contracted by 2.9 percent, did only temporary damage to the job market. If there was a downside to the report, it was in the number of people working fewer hours than they wanted. Again, Ryan Sweet.
SWEET: The number of people working part-time for economic reasons increased in June, and, you know, that may catch the Fed's attention a little bit and kind of temper their enthusiasm about the strength of the job market.
ZARROLI: In fact the report will give Federal Reserve officials plenty to think about. The June report shows wages grew at 2 percent over the preceding 12 months, and that suggests that inflation remains a distant threat. At the same time, the continued growth in the job market will have to give Fed officials pause. The Fed has kept interest rates near zero for more than five months. It also buys up billions of dollars' worth of bonds every month. The rate of bond purchases has been slowing considerably. The strength of this morning's report suggests that Fed officials may have to pull back on the purchases more quickly and prepare for the day when extraordinary measures to help the economy are no longer needed. Jim Zarroli, NPR News. Transcript provided by NPR, Copyright NPR.