The number of people employed in the U.S. has hit a record high at the end of June after another month of employment growth. According to the U.S. Bureau of Labor Statistics, the U.S. economy created 222,000 jobs in the non-farm sector in June against expectations of 178,000. After revisions to previous months’ figures, the unemployment rate rose from 4.3% to 4.4% while the average hourly pay rate rose by 2.5% over the last 12 months.
The total number of employed person in the U.S at the end of June was 146.4 million in the non-farm sector and 153.2 million overall. Since the start of the year over 1 million new jobs have been created in the non-farm sector. While employment growth was strong and the employment-to-population ratio increased from 60.0% to 60.1%, the unemployment rate increased as more people joined the search for work and the participation rate increased from May’s rate of 62.7% to 62.8% in June.
The U.S. has not had a negative employment growth figure since September 2010 which is 81 months ago. There have already been two rate rises this year and some expect a third rise later this year. However, the hourly wage increase of 2.5% was described as “benign” by Westpac’s Imre Speizer, although he described the overall result as the numbers as “decent”. On balance, he did not think the employment figures would be a possible obstacle to tighter U.S. monetary policy. “This will not alter the basic Fed profile for another hike before the year is out, nor the commencement of reinvestment tapering, although some of the doves will feel emboldened to hammer home the low wage/inflation theme.”