The unemployment rate, which was a big deal politically leading up to the November election but is rarely mentioned outside of economic circles now, was unchanged at 7.6 percent. That the rate remained static is actually good news because it means workers who had been sitting out the recession are coming back into the job market.
The labor-force participation rate — those with a job or actively looking for one — rose to 63.5 percent, briefly halting a long-term decline from a peak of 67.3 percent in 2000. The decline is as much demographics as economics because much of it is due to baby boomers retiring.
The 195,000 new jobs reflect robust growth. In revised figures, the government said 70,000 more jobs were added in April and May — 50,000 in April, 20,000 in May — than previously reported. It’s likely the June number will be revised upward next month, too. The economy has added an average 202,000 jobs a month for the past six months, meaning fears that the tax hikes at the beginning of the year and the mandatory cuts in federal spending would hurt the job market haven’t materialized, at least as yet.
Average hourly pay rose 10 cents to $24.01, staying well ahead of inflation. Pay rose 2.2 percent over the preceding 12 months while prices rose only 1.4 percent.
Strong unemployment reports always cause a flutter in the bond market because they likely indicate a cutback in the Federal Reserve’s $85 billion-a-month asset-buying program. And bond yields did rise on the jobs report, from 2.56 percent to 2.7 percent, showing that bond buyers at least believe the economic improvement is real.
The Fed’s bond purchases have pumped money into those sectors of the economy that rely heavily on credit, like home purchases and car sales, but the Fed has indicated it will begin winding down the program toward the end of the year and end it altogether on that happy day when unemployment drops to 6.5 percent.
Let’s just hope that’s sooner, rather than later.