US economy rebounds with June hiring surge of 287000

U.S. economy jobs report

Workers construct a building in Boston on Thursday

The strong rebound in hiring last month, after nearly zero new jobs were added in May, allayed worries that the long recovery in the labor market and the economy was coming to an abrupt end.

"We can all breathe a big sigh of relief", said Harry Holzer, a Georgetown University professor and former chief economist at the Labor Department. Those conditions gave investors a boost Friday, sending stocks soaring: The S&P 500 surged to near its record closing high.

The sign of strength in the economy, however, precedes Britain's stunning vote last month to leave the European Union. Analysts expect at most one rate hike this year. Unemployment ticked up to 4.9 per cent in June, Friday's report showed. But the robust job growth served as a reminder that through much of the US economy's seven-year recovery from the Great Recession, it has repeatedly withstood crises and recessions overseas. And that means the same slow and steady - some would say fragile - growth that has marked much of the recovery. Concerns persist about the vitality of the economic recovery, which reached the seven-year point this month.

Still, the latest jobs report was welcome news for Hillary Clinton, the presumptive Democratic presidential nominee. Another month of weak hiring would have dealt a blow to her political fortunes as they are inextricably linked to the performance of President Barack Obama and the economy.

May's job creation numbers in fact were revised downward in Friday's data from the original 38,000 reported to just 11,000.

The official unemployment rate did rise to 4.9 percent from 4.7 percent, but that was largely because more Americans re-entered the workforce. It rose 2.6 percent in June from 12 months earlier.

The average pay of private-sector workers rose just 2 cents an hour, to $25.61.

To achieve "full employment", which is a stated goal of Federal Reserve monetary policy, Bivens said that on a monthly basis the economy needs to create "somewhere between 250,000 to 280,000 jobs over the next twelve months". The number of involuntary part-time workers dropped significantly in June. Separate data suggest job openings are ample but that employers are having trouble finding qualified workers.

Employment in the leisure and hospitality sector increased 59,000 in June, while payrolls in the health care and social assistance sector grew 58,000. And hiring occurred in both higher and lower-paying sectors. And a broader measure of unemployment that includes discouraged job seekers and those who would prefer to work full time instead of part time ticked down to 9.6 percent in June but is still almost twice the official rate.

Bill Spriggs, chief economist at the AFL-CIO, said things remain tough for working-class Americans. "While 14,000 new manufacturing jobs last month is a positive development, we have lost 24,000 manufacturing jobs so far this year", Timmons said. The Atlanta Fed is now forecasting the economy growing at a 2.4 percent pace in the second quarter. But unlike a sharp drop-off that might signal a possible recession, "this looks more like a graceful slowing into a lower channel of job growth, which is normal at this late stage of the business expansion", Morgan Stanley chief US economist Ellen Zentner said. "It puts us back on a path of moderate growth".

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