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In this Monday, June 24, 2013, photo, a job seeker gets her resume critiqued at a career fair, in King of Prussia, Pa. U.S. employers added a robust 195,000 jobs in June and many more in April and May than previously thought. The job growth raises hopes for a stronger economy in the second half of 2013. (AP Photo/Matt Slocum)
Economy adds robust 195K jobs, jobless rate remains same
Jobs » Growth suggests a stronger economy and makes it more likely the Fed will slow bond purchases.
First Published Jul 05 2013 07:24 am • Last Updated Dec 07 2013 11:35 pm

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.

At a glance

Retail and service firms drive June hiring

June’s robust hiring was driven again by the U.S. service industry, signaling growing confidence in the American consumer.

The hospitality industry, which includes restaurants, hotels, casinos and amusement parks, led all groups with 75,000 added jobs. More than two-thirds of those were at restaurants.

Retailers added 37,100 jobs. Professional and business services added 53,000 positions. The financial industry created 17,000 jobs.

Construction firms added 13,000 jobs last month, further evidence of the strengthening recovery in housing. Through the first six months of the year, the industry has created 101,000 jobs.

The weakest parts of the job market remain manufacturing and government.

Factories shed jobs for the fourth straight month and have cut 24,000 positions since February.

And governments cut jobs for the fourth time this year, although the job losses were strictly at the federal and state levels. Local governments added 13,000 jobs and have created 49,000 since February.

Here’s a look at the jobs added or lost in each major industry category:

Industry » June/May/Past 12 months

Construction » 13,000/7,000/190,000

Manufacturing » 8,000/9,000/29,000

Retail » 37,100/26,900/300,100

Transportation, warehousing » 5,100/6,800/56,600

Information (Telecom, publishing) » 5,000/1,000/13,000

Financial services » 17,000/6,000/108,000

Professional services (Accounting, temp work) » 53,000/65,000/624,000

Education and health » 13,000/23,000/366,000

Hotels, restaurants, entertainment » 75,000/69,000/514,000

Government » 7,000/12,000/64,000

Source: Labor Department

June brings more jobs to men and teenagers

The U.S. unemployment rate may have been unchanged last month from May at 7.6 percent. But for adult men, who make up a slight majority of the workforce, June was a time of improvement.

Unemployment for men 20 and older dropped to 7.0 percent. That’s down from 7.2 percent in May and just above March’s 6.9 percent — the lowest since November 2008.

The rate for white adult men fell to 6.2 percent from 6.4 percent in May. Unemployment was also lower for black adult men — going from 13.5 percent in May to a still-high 13.0 percent.

Early-summer hiring wasn’t quite as kind to adult women. Their unemployment rate rose to 6.8 percent, up from a four-year low of 6.5 percent. And unemployment for black women 20 and older shot up to 12 percent, from 11.2 percent in May.

All those restaurant and retail jobs added in June appeared to help teenagers: Unemployment for that group fell to 24 percent, down from 24.5 percent in May.

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In Utah, the jobless rate in May stood at 4.6 percent. The state Department of Workforce Services will issue a preliminary estimate of June unemployment on July 19.

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 5½ 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.

Among the employers benefiting from Americans’ continued willingness to spend is Carlisle Wide Plank Floors, based in Stoddard, N.H. Carlisle makes hardwood flooring used in stores, restaurants and hotels. CEO Michael Stanek said orders jumped 30 percent in the first quarter compared with a year earlier.

The company is hiring factory, sales and administrative employees to meet the higher demand. Carlisle expects to add about 15 employees this year to its 85-person workforce.


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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. The low rates have also helped support an economy that’s had to absorb government spending cuts and a Social Security tax increase that’s shrunk paychecks this year.

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.

Chairman Ben Bernanke has said the Fed’s bond buying could end around the time unemployment reaches 7 percent. The Fed foresees that happening around mid-2014. But Silvia said he didn’t think unemployment would reach 7 percent by then. He thinks the Fed could continue its bond buying into 2015.

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. The hotels, restaurants and entertainment industry added 75,000 jobs in June. This industry has added an average 55,000 jobs a month this year, nearly double its average in 2012. Retailers added 37,000. Temporary jobs rose 10,000.

The health care industry added 20,000 and construction 13,000. But manufacturing, which includes many higher-paying positions, shed 6,000 jobs. The manufacturing sector has weakened this year.

And many of the new jobs are only part time. The number of Americans who said they were working part time but would prefer full-time work jumped 322,000 to 8.2 million — the most in eight months.

Last month’s job growth came solely from the private sector, particularly services firms. Government jobs fell 7,000, mostly at the federal level. The federal government has shed 65,000 jobs in the past 12 months. Some of that decline is due to the spending cuts that kicked in March 1.

Declining government employment has been a drag on the job market since the Great Recession ended four years ago. In a typical recovery, governments typically add at least 20,000 jobs a month.

Solid hiring in the private sector is lifting wages, even in some lower-paying industries. Average hourly pay for retail employees, for example, rose 6 cents in June to $16.64, and is up nearly 2 percent in the past year.

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