Upcoming fishing rodeos
July 9, 2007Ray Fonseca
July 11, 2007Employers added 132,000 jobs, paychecks grew solidly and the unemployment rate stayed at a low 4.5 percent in June, fresh evidence that the once listless economy is regaining energy.
The new snapshot of conditions across the country, released by the Labor Department on Friday, showed that companies have a respectable – albeit not ravenous – appetite to hire and that there are opportunities for job seekers willing to pursue the hunt.
For the national economy, the modest pace of hiring is consistent with business activity that is picking up speed _ but not too much _ and suggests consumers will have the financial wherewithal to withstand the sting of high gasoline prices. All that bodes well for the country’s economic health.
“It is beginning to look as if the early year economic malaise was really just the pause that refreshed,” said Joel Naroff of Naroff Economic Advisors. “Job growth in June was decent but nothing spectacular.”
The tally of 132,000 new jobs was lower than the robust 190,000 for May. It was sufficient to hold the unemployment rate at 4.5 percent, where it has stood for three months.
New hiring in education, health care, food services and government helped drive overall job growth. Construction companies also expanded employment – even as they coped with fallout from the housing slump. Those gains swamped job cuts in manufacturing, retailing, real estate, legal services, banking and elsewhere.
Employment gains for April and May turned out to be stronger, a development that also reinforced economists’ belief that the economy rebounded in the second quarter. Employers added 75,000 more jobs in those two months combined than the government estimated a month ago.
Workers saw modest wage gains in June.
Average hourly earning rose to $17.38, a 0.3 percent increase from May. Over the past 12 months, wages grew by 3.9 percent.
Wage growth supports consumer spending, a major ingredient in healthy overall economic activity. Wage growth is probably outpacing inflation, economists estimate. Still, workers pinched by high gasoline prices may not feel their paychecks are growing as much as they like.
Federal Reserve Chairman Ben Bernanke and his colleagues keep a close eye on wages for any signs that they might generate inflation. Out-of-control inflation shrinks paychecks, erodes purchasing power and eats into the value of investments.
The Federal Reserve last week noted that there have been improvements on some inflation readings but made clear that it is not letting down its guard. The biggest danger to the economy is if inflation doesn’t recede as anticipated, the Fed said.
Fed policy-makers have enough faith in their inflation forecast, though, that they left a key interest rate last week at 5.25 percent, where it has been for a year. Economists believe rates could stay where they are for the rest of this year.
Companies have continued to hire at a decent pace even as the economy has endured a period of sluggishness. But the strain of the ailing housing market and problems in the automotive industries have clearly been felt.
In the first half of the year, job growth averaged 145,000 a month. That was weaker than the average monthly gain of 189,000 for 2006.
“There has been a slight scaleback in the pace of hiring but it hasn’t been that significant overall,” said Brian Bethune, economist at Global Insight. “Businesses’ appetite to hire is generally still pretty good.”
Of the 132,000 total jobs added in June, 40,000 came from the government. The remaining 92,000 were from private employers.
Economic growth nearly stalled in the first three months of this year, with business expansion slumping to a pace of just 0.7 percent, the worst in more than four years. The ailing housing market was a main factor.
The economy rebounded in the April-to-June quarter, expanding at a pace of around 3 percent or better according to some projections. The government’s estimate will be released later this month.
Across the country, the length of job hunts was little changed.
The average time the 6.9 million unemployed people spent in their job searches was 16.8 weeks in June, up slightly from 16.7 in May.
“This is a time to be looking to join the job market and be part of the job market,” Commerce Secretary Carlos Gutierrez said in an interview. “This suggests this is a very good time for our economy and for people to take full advantage of it.”
