After a dismal May jobs report that only saw the creation of 38,000 jobs, June’s report provided a collective sigh of relief as it showed payroll employment growth expand by 287,000 jobs.
The unemployment rate increased to 4.9 percent, from May’s 4.7 percent, thanks in large part to a big increase in the labor force. Most economists consider an unemployment rate around 5 percent to be normal.
Over the past 12 months ending in June, average hourly earnings increased 2.6 percent and, when combined with the gains in the labor force and the declines in the number of involuntary part-time workers, a clearer picture of the health of the labor market is created than by just looking at the unemployment rate.
While the June report will ease the fears of many, it probably still isn’t enough to prompt a rate hike at the July Federal Open Market Committee meeting.