July 10, 2007 > US jobless rate holds
US jobless rate holds
By Jeannine Aversa, AP Economics Writer
WASHINGTON (AP), Jul 06 _ Employers 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 U.S. 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.
On Wall Street, the employment news helped to lift stocks. The Dow Jones industrials gained 45.84 points to close at 13,611.68.
Workers saw modest wage gains in June.
Average hourly earning rose to $17.38 (euro12.78), 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 does not recede as anticipated, the Fed said.
The U.S. central bank's 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.
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.
On the Net:
Employment report: http://www.bls.gov/home.htm