US job gains in June beat forecast, unemployment rate low

The U.S. employers picked up the pace of hiring in June significantly while unemployment rate dropped to an almost six-year low, a sign that the world's largest economy is on track to bounce back from the weather-related contraction in the first quarter.
The nonfarm payroll employment increased by 288,000 in June, posting the fifth consecutive month with job gains above 200,000, much higher than economists' expectation of 215,000. The unemployment rate declined from 6.3 percent to 6.1 percent, the lowest level since September 2008, the Labor Department said Thursday.
"This is the first time since September 1999-January 2000 we have seen total job growth above 200,000 for five straight months, " Jason Furman, chairman of the Council of Economic Advisers, said in a statement following the jobs report.
"In addition, the 1.4 million jobs added in the first half of this year are the most in any first half since 1999," he added.
In June, almost every major industry added jobs, led by professional and business services, retail trade, food service and health care, the Labor Department said.
Employment in professional and business services rose by 67,000, and retail trade added 40,000 jobs over the month. Meanwhile, manufacturing employment edged up by 16,000, while construction sector added 6,000.
The labor force participation rate, the gauge for people either working or seeking jobs, stayed at 62.8 percent for the third consecutive month. Still, it was significantly below the 66 percent level that prevailed before the recession.
The number of long-term unemployed, or those jobless for at least 27 weeks, declined by 293,000 in June to 3.1 million, accounting for 32.8 percent of the unemployed.
Average hourly earnings rose by six cents to 24.45 U.S. dollars in June. Over the past 12 months, average hourly earnings have risen by 2 percent, basically in line with consumer price inflation.
After revision, employment gains in April and May were 29,000 higher than previously reported. In the second quarter, job growth has averaged 272,000 per month, higher than the average monthly gain of 203,000 over the past year.
Economic Policy Institute economist Heidi Shierholz cautioned that although this is a strong jobs report, the economy still faces "a huge hole" in the labor market. "Even if we saw June's rate of job growth every month from here on out, we still wouldn't get back to health in the labor market for another two and a half years."
But the strengthening job market confirms the Federal Reserve's view that the U.S. economy will gain momentum and bounce back after unexpectedly shrinking at an annual rate of 2.9 percent in the first quarter largely because of a brutally cold winter.
The central bank is on track to continue trimming its bond purchase program and end it by the end of this year. Most analysts predict that the Fed will wait until mid-2015 to start raising its benchmark short-term interest rates despite an improving economy.