Economy adds 195K jobs; unemployment 7.6%
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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, an effort to lower long-term interest rates and boost the economy, as early as September.
The national unemployment rate remained 7.6 percent in June 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.
On Long Island, the unemployment rate in May -- the most recent local data available -- was 6.1 percent.
The Labor Department's report Friday pointed to a U.S. job market that's showing surprising resilience amid tax increases, federal spending cuts and economic weakness overseas. Employers have added an average 202,000 jobs per month 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, with the Dow Jones industrial average gaining 147 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, although it will increase the cost of buying or refinancing a home.
Friday's report showed that the U.S. economy added 70,000 more jobs in April and May than the government had previously estimated -- 50,000 in April and 20,000 in May.
Further job growth could lower unemployment and help the economy rebound after a weak start this year. If so, the Fed would likely scale back its bond purchases later this year.
The Fed has been buying $85 billion in Treasury and mortgage bonds each month since late last year. The purchases pushed long-term interest rates to historic lows, fueled a stock rally and encouraged consumers and businesses to borrow and spend.
John Silvia, chief economist at Wells Fargo, said he thinks the Fed will announce at its September policy meeting that it will start reducing its bond purchases, perhaps to $75 billion a month.
Friday's report contained at least one element of concern: Many of the job gains were in generally lower-paying industries, a trend that emerged earlier this year.