June Jobs Report Signals There Is More Room for Growth

The unemployment rate rose very slightly to 4.4 percent in June, as the estimated size of the labor force expanded at its fastest rate (361,000) since last July (406,000). This is the third consecutive June in which the labor force estimate reversed a big change in May. Thus, despite the rise in the unemployment rate, the 245,000 net new jobs in June raised the overall employment-to-population ratio from 60.0 percent in May to 60.1 percent in June.

The establishment survey showed further evidence that last month’s seeming weakness was a little misleading. Job growth rose to 222,000 in June, and these nonfarm payroll jobs for April and May were revised up by 47,000.

Finally, average hourly wages ticked up by 4 cents in June, and 2.5 percent over the last twelve months.

Thus, people continue to return to the labor force as jobs continue to be made available. This suggests that despite low unemployment there is room for growth.