Strong June Job Growth Avoids Summer Hiring Slowdown

Econ indices June 2013For the second consecutive month, the U.S. created 195,000 new jobs last month, well above economists estimates and breaking the summer hiring slowdown that has bedeviled the economy since the beginning of the recession.

The U.S. Department of Labor, which released its monthly employment report this morning, also adjusted upward its job counts for April and May, saying 70,000 more non-farm jobs were created than initially reported. The unemployment rate held steady at 7.6%.

Surveys of economists over the last week put their average estimates of June’s new jobs at about 165,000. Many had expected the unemployment rate to decline slightly, but an influx of new workers into the labor force last month, held the rate steady.

Robert Murphy, an economics professor at Boston College, told ABC News that this morning’s jobs report “is good news that the recovery may now be on a sustained path.”

“But the job gain merely kept pace with the rise in the labor force, so that the number of unemployed, at 11.8 million, was essentially unchanged,” he added.  “Greater gains in jobs will be needed to push unemployment down significantly over the next year.”

The so-called U-6 unemployment rate actually rose from 13.8% in May to 14.3% last month. U-6 is a measure of both the unemployed and those who are working part-time because they can’t find other work. Added together, they total some 22.5 million workers.

Most of the unemployment is concentrated among workers with only a high school education or some limited college. The unemployment rate among college graduates was 3.9% in June, slightly up from May’s 3.8%.

Despite the stronger than expected report, job growth in the second quarter of the year averaged 197,000 jobs a month, down from the 206,000 a month in the first quarter.

Job growth in June was strongest in the hospitality industry. There, restaurants and bars added 57,400 new jobs, a sign, analysts said, that Americans are more confident about the direction of the economy and are willing to spend more on leisure. That sector as a whole — which includes hotels, amusement parks, recreation, sporting events and museums — was up by 75,000 jobs. That’s more than twice the gains the sector showed last year.

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Temp hiring was also up, although not as strongly as it has been in some months, adding 9,500 jobs. But the professional and business services sector, which includes temps, legal, accountants, computer professionals, and building services, added 53,000 jobs.

Healthcare, like temp services, another consistent growth area throughout the recession, added 23,500 jobs. Retail added 37,000.

Overall the services sector accounted for 194,000 of the 202,000 new private sector jobs. Governments shed a net 7,000 jobs, with the federal government cutting 5,000 positions.

Manufacturing lost 6,000 jobs and would have reported more, except that the automobile industry added 5,100. Auto sales nationwide have been growing strongly, as consumers replace cars and trucks they’ve been holding onto as they weathered the last several years.

Construction also added jobs, growing by 13,000. Another sign of economic improvement.

The report also showed that average hourly wages jumped 10 cents to $24.01. Over the year, average hourly earnings have risen by 51 cents, or 2.2%

John Zappe is the editor of TLNT.com and a contributing editor of ERE.net. John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.

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