The United States economy added 287,000 new jobs in June, a strong performance. The economists expected, on the average, 170,000 new jobs, so this is a positive surprise. The unemployment rate increased from 4.7% to 4.9% as more people started looking for work. (Only those actively seeking work are considered to be unemployed.)
There seems to be pressure on wages as the labor market tightens, claims MarketWatch report. Average hourly wages now stand at $25.61, which is a 2.6% increase from a year ago.
However, many economists believe that June’s level of hiring is unlikely to be repeated on a regular basis.
Among the biggest job gainers in June were professional and business services, education and health, and information-related jobs. Mining, logging, and transportation jobs have declined slightly.
When it comes to May, the number of new jobs created was revised lower to only 11,000. But, in April, new jobs were revised up from 123,000 to 144,000.
Since 2011, 13 million jobs were created, bringing unemployment rate back to 2007 level, which was prior to the financial crisis of 2008.
The investors reacted positively to the news. Major indices went up and so did the price of oil. Now, it is possible that the next rate hike will occur sometime this year as the American economy shows signs of strength. Now, the question is how many rate hikes and how fast.