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[size=+1]June Hiring Up, Unemployment Rate Drops to 5 percent, lowest since September 2001[/size]
<SMALL>AP ^ | July 8, 2005 | JEANNINE AVERSA</SMALL>
Hiring around the country picked up slightly in June with employers adding 146,000 jobs — helping to push the unemployment rate down to 5 percent, the lowest in nearly four years.
The latest snapshot of the nation's jobs climate, released by the Labor Department on Friday, supported the view of Federal Reserve Chairman Alan Greenspan and his colleagues that the labor market continues to improve gradually.
The modest payroll gain of 146,000 jobs in June was up from 104,000 net jobs added in May. Payroll growth for both April and May turned out to be better than the government previously reported. Still, the strength of job growth seen in June was likely to disappoint economists. Before the release of the report, they were forecasting a more robust increase of around 195,000 jobs for the month.
"It all suggests that the labor market is improving a bit. But it's kind of anemic compared with what we were expecting. It really does validate the Fed's view. There is a gradual improvement in the labor market. But it is very gradual," said William Cheney, chief economist at John Hancock Financial Services.
Manufacturers shed jobs in June for the fourth month in a row. Job growth slowed in retailing but picked up briskly in professional and business services, and in the leisure and hospitality field.
The 5 percent civilian unemployment rate, meanwhile, was down a notch from the 5.1 percent registered in May. It matched the jobless rate in September 2001 and was bested only by a 4.9 percent unemployment rate in August 2001.
The Federal Reserve, wanting to keep inflation in check, lifted a key interest rate by one-quarter percentage point to 3.25 percent last week. Fed policymakers suggested the economy and the job market are in good shape despite the toll of high energy prices.
"Although energy prices have risen further, the expansion remains firm and labor market conditions continue to improve gradually," Fed policymakers said last week.
Oil prices surged to $61.28 a barrel on Wednesday, a closing price that marked a new record high.
Still with the labor market improving gradually rather than by leaps and bounds, economists said Friday's report justifies the Fed staying on its course of modest, quarter-point interest rate increases this year.
The labor market, which has seen uneven job growth from month to month, is one part of the economy that has struggled to get back to full throttle after the 2001 recession. Economists would like to see steady payroll gains of at least 150,000 each month.
President Bush, plagued by questions about the health of the job market in his first term, wants to see the country enjoy good economic conditions, especially as he tries to sell his plans for overhauling Social Security.
In June, manufacturers cut 24,000 jobs. Makers of motor vehicles and parts, which have cut production and offered promotions to sell off excess inventories and entice buyers, lost 18,000 jobs over the month.
Professional and business services, however, added a robust 56,000 jobs in June, up from 10,000 new positions created in May. Employment in financial activities grew by 16,000, an improvement from the 4,000 new jobs seen in the previous month. Leisure and hospitality companies stepped up payrolls by 19,000 in June after being flat in May.
Education and health services expanded payrolls by 38,000, down from 46,000 in May. Retailers added just over 2,000 jobs in June, compared with roughly 15,000 the month before.
The average time that the unemployed spent in their search for work in June was 17.1 weeks, an improvement from the average 18.8 weeks registered in May.
Workers' average hourly earnings, meanwhile, rose to $16.06 in June, up from $16.03 in May. The unemployment rate is calculated on the basis of a survey of 60,000 households, sort of a poll of the jobs market. Economists tend to give more credence to the much broader survey of payrolls, which examines 400,000 work sites. That's the survey that showed 146,000 jobs were generated in June.
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<SMALL>AP ^ | July 8, 2005 | JEANNINE AVERSA</SMALL>
Hiring around the country picked up slightly in June with employers adding 146,000 jobs — helping to push the unemployment rate down to 5 percent, the lowest in nearly four years.
The latest snapshot of the nation's jobs climate, released by the Labor Department on Friday, supported the view of Federal Reserve Chairman Alan Greenspan and his colleagues that the labor market continues to improve gradually.
The modest payroll gain of 146,000 jobs in June was up from 104,000 net jobs added in May. Payroll growth for both April and May turned out to be better than the government previously reported. Still, the strength of job growth seen in June was likely to disappoint economists. Before the release of the report, they were forecasting a more robust increase of around 195,000 jobs for the month.
"It all suggests that the labor market is improving a bit. But it's kind of anemic compared with what we were expecting. It really does validate the Fed's view. There is a gradual improvement in the labor market. But it is very gradual," said William Cheney, chief economist at John Hancock Financial Services.
Manufacturers shed jobs in June for the fourth month in a row. Job growth slowed in retailing but picked up briskly in professional and business services, and in the leisure and hospitality field.
The 5 percent civilian unemployment rate, meanwhile, was down a notch from the 5.1 percent registered in May. It matched the jobless rate in September 2001 and was bested only by a 4.9 percent unemployment rate in August 2001.
The Federal Reserve, wanting to keep inflation in check, lifted a key interest rate by one-quarter percentage point to 3.25 percent last week. Fed policymakers suggested the economy and the job market are in good shape despite the toll of high energy prices.
"Although energy prices have risen further, the expansion remains firm and labor market conditions continue to improve gradually," Fed policymakers said last week.
Oil prices surged to $61.28 a barrel on Wednesday, a closing price that marked a new record high.
Still with the labor market improving gradually rather than by leaps and bounds, economists said Friday's report justifies the Fed staying on its course of modest, quarter-point interest rate increases this year.
The labor market, which has seen uneven job growth from month to month, is one part of the economy that has struggled to get back to full throttle after the 2001 recession. Economists would like to see steady payroll gains of at least 150,000 each month.
President Bush, plagued by questions about the health of the job market in his first term, wants to see the country enjoy good economic conditions, especially as he tries to sell his plans for overhauling Social Security.
In June, manufacturers cut 24,000 jobs. Makers of motor vehicles and parts, which have cut production and offered promotions to sell off excess inventories and entice buyers, lost 18,000 jobs over the month.
Professional and business services, however, added a robust 56,000 jobs in June, up from 10,000 new positions created in May. Employment in financial activities grew by 16,000, an improvement from the 4,000 new jobs seen in the previous month. Leisure and hospitality companies stepped up payrolls by 19,000 in June after being flat in May.
Education and health services expanded payrolls by 38,000, down from 46,000 in May. Retailers added just over 2,000 jobs in June, compared with roughly 15,000 the month before.
The average time that the unemployed spent in their search for work in June was 17.1 weeks, an improvement from the average 18.8 weeks registered in May.
Workers' average hourly earnings, meanwhile, rose to $16.06 in June, up from $16.03 in May. The unemployment rate is calculated on the basis of a survey of 60,000 households, sort of a poll of the jobs market. Economists tend to give more credence to the much broader survey of payrolls, which examines 400,000 work sites. That's the survey that showed 146,000 jobs were generated in June.
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