MNI: US Payrolls Up Despite Rising Unemployment Rate

The pace of job growth accelerated in June, the Bureau of Labor Statistics said Friday, an encouraging sign that labor market conditions are improving, though unemployment was on the rise and the participation rate and employment-population ratio, favored by the Federal Reserve, were unchanged.

Employers added 850,000 jobs through June, beating expectations for a 711,000 increase. May's disappointing 559,000 gain was revised up slightly to 583,000, while April's 278,000 increase was revised down to 269,000. With those revisions, employment in April and May combined is 15,000 higher than previously reported, the BLS said.

Total private payrolls rose 662,000 through June when markets had expected an increase of 615,000. Notable job gains came from leisure and hospitality (+343,000), as highlighted in MNI's Reality Check, professional and business services (+72,000), and retail trade (+67,100). Government payrolls were up 188,000 through the month.

Meanwhile, the unemployment rate inched up by a tenth to 5.9% when markets had expected it to fall to 5.6%.

JOB LEAVERS

Among the unemployed, the number of job leavers, or unemployed individuals who quit their jobs and began looking for new employment, increased 164,000 to 942,000. The number of people on temporary layoff was essentially unchanged at 1.8 million, as was the number of permanent job losers at 3.2 million.

The median duration of unemployment dropped to 17.6 weeks from 19.9 weeks in May, but long-term unemployment, or those jobless for six months or more, grew to 4 million after falling to 3.8 million through May, now accounting for 42.1% of total unemployment.
The U-6 rate, which accounts for discouraged workers, fell to 9.8% from 10.2% in May

The number of people not in the labor force who currently want a job fell to 6.4 million from 6.6 million in May. These individuals were not counted in the official unemployment rate because they were not actively looking for work sometime in the last four weeks.

The participation rate was unchanged at 61.6%, as was the employment-population ratio at 58.

Average hourly earnings were up 0.3% in June after increasing 0.4% through May. From a year earlier, hourly wages were up 3.6%, far more than May's 2% gain. The length of the average workweek fell by a tenth to 34.7 hours.