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Economy adds 222,000 jobs in June: Unemployment rate stands at 4.4%

The economy added a seasonally adjusted 222,000 jobs in June, the largest increase since February, the Labor Department said Friday. It was stronger than what economists expected.

Meanwhile, revisions showed job growth was better in April and May than previously thought. The economy has created an average of 194,000 jobs over the past three months. That compares favorably to a monthly average of 166,000 during the first quarter, and pace of 187,000 for all of last year.

The unemployment rate rose a tenth of a percentage point to 4.4%, edging up from the lowest level since May 2001, the Labor Department said Friday.

Federal Reserve officials project the jobless rate will average 4.5% to 4.8% over the long run.

The increase in the unemployment rate reflects more Americans entered the labor force in June, but not all of them found jobs.

Our current level of unemployment suggests the economy is at or very near to full employment, or the point at which nearly all job seekers have found work.

It's the same old story for the closely watched labor force participation rate, too.

This measure, which tracks how many people who could be working or want to be working actually are working, stood at 62.8% in June, essentially flat. In May, it was at 62.7%. In June 2016, it was at 62.7%.

The participation rate "has shown no clear trend over the past year," the BLS said.

The trend that would indicate a healthy economy would be if this ratio were going up. In June 2007, this number was 66.0%.

So who was hiring in June?

In the private sector, the jobs were spread out pretty broadly, although on first glance it does seem like the bulk of net new jobs came in relatively low-paying sectors.

Health care added 37,000 jobs, with 26,000 of that coming in ambulatory health care services.

Social assistance - family services and child care - added 23,000, and that is a category that doesn't usually add enough jobs to warrant getting its own line in the BLS report, but it did this month.

Professional and business services, a broad category that includes everything from architects to temps, added 35,000 jobs. Temp jobs added 13,400 jobs, and admin and support services added 11,600 jobs.

Financial services added 17,000 jobs.

Mining added 8,000 jobs.

If you look at the unemployment rate, and just the unemployment rate, you would almost certainly conclude that the nation is at a state of "full employment," where basically everybody who could or should be working is working.

Since 1970 the unemployment rate been lower only one time, when it fell all the way to 4% in the summer of 2000. In 2007, it fell as low as 4.4%.

So, what would lead one to argue that we aren't at full employment now? Well, wages.

The weak pace of wage growth, "suggests that we’ve not yet checked off the 'full employment' box," said Bankrate.com's senior economist, Mark Hamrick, "meaning more progress can be extracted from the job market.

"More than 5 million Americans still work part-time who’d like to have full-time work."

U.S. employers added a seasonally adjusted 1,079,000 jobs during the first six months of 2017, the weakest first-half performance since 2010, but just barely, according to data the Labor Department.

The number is only 2,000 fewer jobs that created in the first half of last year, suggesting job creation is maintaining a steady pace, despite economists expectations that hiring would slow as employers face a tighter labor market, reflected by a 4.4% unemployment rate in June.


U.S. employers have added at least a million jobs in the first half of every year since adding 749,000 to start 2010, the first full year of the expansion. The best recent first-half gain occurred in 2014, when nearly 1.5 million jobs were created.

Last month's strong hiring, combined with upward revisions for April and May, showed job creation in 2Q was accelerating slightly compared to 2016's full-year pace.

It's not a particularly good idea to use the jobs report as a scorecard for different administrations in the White House, for a variety of reasons, but we understand that people will and do do it.

To that end, the jobs machine in the first five months of the Trump administration looks very much like the jobs machine in last five months of the Obama administration.

The last five months of Obama, giving him credit for January's 216,000 jobs, total 908,000 net new jobs.

The first five months of the Trump administration, starting with his first full month in office, February, total 863,000 jobs.

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