The U.S. economy added 195,000 jobs in June, according to an initial Bureau of Labor Statistics report issued Friday morning, exceeding analyst expectations and suggesting the economic recovery is enduring despite the contractionary effects of sequestration and higher taxes that took effect earlier this year, and recent statements from the Federal Reserve indicating an eagerness to begin winding down its stimulative policies.
The unemployment rate remains unchanged at 7.6 percent, but that’s notably not a reflection of inadequate job-creation, which on its own can sustain the current unemployment rate with fewer than 100,000 new payrolls a month.
Instead, the uptick is due to a welcome increase in the size of the labor force.
The best news in the report comes in revisions to previous months’ employment figures, which are subject to much less statistical uncertainty.
April figures bounced up from 149,000 to 199,000, after a mediocre initial showing of 138,000; May figures climbed from an initial count of 175,000 to 195,000, leaving the three month average just shy of an impressive 200,000 jobs a month
The internal figures in the June report are also impressive, with hospitality, retail, and professional services accounting for the majority of job gains. Health care continued to be a growth area, showing a gain of 20,000 jobs last month.
However, the report notes that industries and trades like manufacturing, and construction (which is an indicator for the health of the housing sector) showed little or no change over the past month.
The most alarming news comes out of the public sector, which continues to be a drag on growth, and now shows real signs of sequestration’s impact on the labor market. Overall, government shed 7,000 jobs in June. In previous years, most public sector job losses were at the state and local level. Now, federal job losses account for a significant chunk of the overall measure. This month the federal workforc shed 5,000 jobs, only 1,000 of which were “expected” postal service job losses.
Local governments picked up the slack, adding 13,000 jobs in June, while state governments dropped a hefty 15,000 employees.
