NEW YORK — Phew. American businesses are hiring again.
The U.S. added 287,000 new jobs in June, according to the Labor Department report released Friday.
It’s a massive rebound from May when the U.S. added a mere 11,000 jobs. In fact, hiring in June hugely exceeded expectations. CNNMoney’s survey of economists projected only 177,000 job gains.
Hiring was strong across the board. The top industries adding workers were leisure and hospitality and health care. Mining is the only sector that’s still struggling: 211,000 mining jobs have been lost since September 2014, largely because of super cheap gas prices.
Unemployment rose slightly in June to 4.9% (up from 4.7% in May). That’s probably a good sign. More Americans appear to be looking for work again.
What it means for the economy
The big boost in hiring in June alleviates fears that the U.S. economy is slowing down. There seemed to be a sigh of relief this morning on Wall Street and Main Street that the economy is still solid, especially after Brexit. Stocks rallied Friday morning.
Perhaps the best news from the jobs report is that wages are finally showing signs of life. Wage growth picked up to 2.6%. That’s still below the 3.5% or so the Fed would like to see, but it’s a healthy bump from earlier in the year when wage growth was barely above 2%. Finding “good paying jobs” has become a key issue on the 2016 campaign trail.
While the June jobs figure is eyebrow raising in a good way, it’s unlikely to be enough to sway the Federal Reserve to raise interest rates when it meets later in July. That said, economists surveyed by CNNMoney project one rate hike in 2016. It’s possible that could come in September, but more likely in December.
Many believe America is at — or near — full employment, but the overall share of Americans working is at its lowest point since the 1970s. The decline in the labor force is partly explain by Baby Boomer retiring, but there’s also concern that some people just gave up looking for jobs after the Great Recession.
America added millions of jobs in 2014 and 2015 in the biggest hiring spree since 1999. The U.S. was routinely adding well over 200,000 jobs a month. That rapid pace of job gains has slowed in 2016.
While the June figure was big, the three-month average for job gains is 147,000 — in line with what the economy has been doing this year.