United States: Payroll growth not as strong as expected, unemployment ticks down to 5.3% in June on decreased participation
July 2, 2015
Non-farm payrolls grew by 223,000 in June, which was below May’s downward revised increase of 254,000 (previously reported: +280,000). June’s result fell short of market expectations of a 230,000 increase. The weaker-than-expected June result and downward revision to May’s figure come as somewhat of a disappointment and suggest that the economy is not firing on all cylinders.
The private sector was entirely responsible for new hiring, having added 223,000 jobs in June. The largest gains were registered in professional business services, healthcare and retail trade. The public sector added no jobs in June. The U.S. economy now has 3.5 million more people employed than at the pre-crisis January 2008 peak.
The unemployment rate—derived from a different survey—fell from 5.5% in May to 5.3% in June. The print was just below market expectations of 5.4%. The lower jobless rate was driven partly by a decrease in the labor participation rate from 62.9% to 62.6% as the number of people working or searching for a job went down. Moreover, while the unemployment rate remained within the Fed’s target zone of 5.2%-5-5%, there was no evidence of wage growth in June as average hourly earnings were unchanged.
Author: Carl Kelly, Economist