The US economy added 287,000 jobs in June, the Bureau of Labour Statistics announced Friday, many more than expected.
It was the biggest gain in eight months and was stronger than even the most optimistic forecasts among economists. Their median estimate was for a nonfarm-payroll gain of 180,000, according to Bloomberg.
At stake in this jobs report was confirmation that a hiring slowdown had not hit the US economy. Just 38,000 job gains were initially reported for May, excluding the impact of 35,000 Verizon workers who were on strike.
“I don’t think this suggests we’re off to the races again, but I think this reinforces this mature trend in jobs growth which is still relatively healthy, but also an economy that’s doing relatively well and is not heading into recession-type conditions,” said Liz Ann Sonders, chief investment strategist at Charles Schwab.
The May print was revised down to 11,000 on Friday. The June jobs report showed that the Verizon workers were added back to information-sector payrolls.
Though the Federal Reserve warned against putting too much weight on one month’s data, it said the weak May jobs report increased its uncertainty about the labour market.
“After the May report, and then in addition we got Brexit, you started to see an increased likelihood of an actual rate cut being the next move by the Fed,” Sonders told Business Insider. “That’s probably where you move the needle,” as bets for lower rates recede.
The unemployment rate increased to 4.9% from 4.7% as more people came back into the workforce. The labour force participation rate rose to 62.7% from 62.6%, and the number of people who worked part time for economic reasons plunged.
Average hourly earnings rose to a post-recession high of 2.6% compared with those of the prior year, and they increased 0.1% month-on-month.
Factory jobs increased by 14,000 after a 16,000 drop in May as the manufacturing sector continues to recover from a slowdown triggered by the strong dollar and weak commodity prices. Big job gains were also recorded in leisure and hospitality, healthcare, and social assistance.
After the report’s release Friday, stock futures surged, the dollar soared, and Treasurys fell.
Via Bloomberg, here’s what Wall Street was expecting:
- Nonfarm payrolls:+180,000
- Unemployment rate: 4.8%
- Average hourly earnings month-on-month: +0.2%
- Average hourly earnings year-on-year: +2.7%
- Average weekly hours worked: 34.4
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