US added more workers in June than forecast

Published: 05 July 2013

Employment increased more than forecast in June, wages picked up and the U.S. jobless rate held close to a four-year low as the world's largest economy weathered the effects of higher taxes and federal budget cuts.

Payrolls rose by 195,000 workers for a second straight month, the Labor Department reported today in Washington. The median forecast in a Bloomberg survey projected a 165,000 gain after a previously reported 175,000 increase in May. The jobless rate stayed at 7.6 percent, while hourly earnings in the year ended in June advanced by the most since July 2011.

Job gains, rising incomes and a rebound in housing are giving Americans reason to boost the spending that accounts for 70 percent of the economy. Stocks climbed after the report, while Treasuries dropped, sending the 10-year yield to the highest in almost two years, on expectations the data make it likelier the Federal Reserve will start trimming the $85 billion monthly pace of bond purchases in September.

"The job market is stronger," said Harm Bandholz, chief U.S. economist at UniCredit Group in New York and the top forecaster of payrolls over the past two years, according to data compiled by Bloomberg. "It's a good number, especially with the upward revisions." Fed "tapering is getting closer."

The Standard & Poor's 500 Index rose 0.4 percent to 1,621.05 at 10:02 a.m. in New York. The 10-year Treasury note yield increased 19 basis points, or 0.19 percentage point, to 2.70 percent, the highest since Aug. 1, 2011.
Private Employment

Revisions to the prior two months' payrolls reports added 70,000 jobs to the employment count in April and May. Gains in private employment overcame declines in government payrolls. Private payrolls increased 202,000 in June after a 207,000 gain the prior month.

Retailers, professional and business services, health care and leisure and hospitality businesses led the payroll gains in June.

The improving labor market is encouraging some people to switch jobs. Among them is Brian Lambert, 44, who last month joined Red Robin Gourmet Burgers Inc., a chain based in Greenwood Village, Colorado, as director of loyalty programs.

"There seem to be a lot of jobs available, it's just a matter of finding the right job," he said. "And then when you do, competition is fierce."
Factory Jobs

Factories (USMMMNCH) reduced payrolls by 6,000 in June, while construction companies added 13,000, the most in three months, today's report showed. Automakers boosted employment by 5,100 workers, the most in four months.

Retailers added 37,100 jobs in June, with most of the increase coming from more hiring at motor vehicle dealerships and home-improvement outlets.

New cars and trucks sold in June at the fastest pace since 2007 as American drivers replaced aging vehicles and a rebound in housing construction moved trucks off dealer lots. That helped new car sales beat estimates last month, giving a lift to General Motors Co (GM). and Ford Motor Co. (F) Brisk sales are boosting hiring at dealerships.

"We would take 10 sales people in a heartbeat," said Don Hicks, owner of Shortline Auto Group in Aurora, Colorado, which employs about 150 people at four dealerships. "If they were available and trained, or trainable, we'd take another five or six technicians. It's crazy trying to find people."

Auto industry sales climbed to a 15.9 million annualized pace, exceeding the 15.5 million median estimate of economists surveyed by Bloomberg. That's the best monthly pace since 16.1 million in November 2007 and compares to 14.3 million a year earlier, according to data from Ward's Automotive Group.
- Bloomberg