US job growth surged in June as factories and retailers boosted hiring, confirming the economy has regained speed after a first-quarter lull, but tepid wage growth could see the Federal Reserve still cautious about hiking interest rates
US job growth surged in June as factories and retailers boosted hiring, confirming the economy has regained speed after a first-quarter lull, but tepid wage growth could see the Federal Reserve still cautious about hiking interest rates.
Non-farm payrolls increased by 287,000 jobs last month, the largest gain since last October, the Labor Department said on Friday. May payrolls were revised down to show them rising 11,000 rather than the previously reported 38,000.
"It's a great number. This affirms the economy is still on decent footing but it doesn't change the Fed's path," said Darrell Cronk, chief investment officer at Wells Fargo Wealth and Investment in New York.
Last month's tally beat economists' expectations for an increase of only 175,000 jobs. While the unemployment rate rose two-tenths of a percentage point to 4.9 percent, that was because more people entered the labor force, a sign of confidence in the jobs market.
Wage growth remains sluggish even as the labor market tightens. Average hourly earnings increased only two cents or 0.1 percent in June. The year-on-year gain in earnings rose to 2.6 percent after advancing 2.5 percent in May.
The strong rebound in June payrolls added to data on consumer spending and housing in suggesting that economic growth accelerated from the first-quarter's anemic 1.1 percent annualized rate. The Atlanta Fed is currently forecasting the economy growing at a 2.4 percent pace in the second quarter.
But the signs of strength in the economy precede Britain's stunning vote last month to leave the European Union.