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U.S. economy adds 195K jobs, jobless rate 7.6 pct.

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WASHINGTON – U.S. employers added 195,000 jobs in June and hiring was more robust in the two previous months than earlier estimated. The gains raise hopes for a stronger economy in the second half of 2013.

The Labor Department said Friday that the economy also added 20,000 more jobs in May and 50,000 more in April than initially reported. The unemployment rate stayed at 7.6 percent, but for a good reason: More people started looking for work. The government counts people as unemployed only if they are searching for jobs.

Americans' paychecks rose at a healthy pace and have outpaced inflation in the past year. Average hourly pay increased 10 cents to $24.01. That's 2.2 percent higher than a year ago. Over the 12 months ending in May, consumer prices rose 1.4 percent.

Stock index futures rose shortly after the report was released at 8:30 a.m. EDT. And the yield on the 10-year Treasury note jumped from 2.56 percent to 2.65 percent, a sign that investors think the economy is improving.

The economy has added an average of 202,000 jobs a month for the past six months, up from 180,000 in the previous six. Hiring and consumer confidence have increase despite higher taxes and federal spending cuts.

Further job growth could lower the unemployment rate and help the economy rebound after a weak start this year. If growth accelerated and unemployment fell, the Federal Reserve might start to scale back its bond purchases before the year ends. The bond purchases have kept long-term interest rates low.

Despite the solid pace of hiring, the economy is growing sluggishly. It expanded at a 1.8 percent annual rate in the January-March quarter. Most analysts expect growth at roughly the same subpar rate in the April-June quarter.

Weak economies overseas cut demand for U.S. exports in May. That led some economists to predict that growth in the second quarter might be slower than forecast. Still, many areas of the economy are improving.

The Fed's low interest-rate policies have encouraged more Americans to buy homes and cars. They've also helped boost stock and home prices in the first half of the year, increasing wealth and lifting consumers' confidence to its highest level in 5 years.

Auto sales in the January-June period topped 7.8 million, their best first half since 2007, according to Autodata Corp. and Ward's AutoInfoBank. Sales of previously occupied homes exceeded 5 million in May, the first time that's happened since November 2009. New-home sales rose at their fastest pace in five years.

Though fewer exports have hurt manufacturing, factories did field more orders in May. And a measure of business investment rose for the third straight month.

A stronger second half fueled by continued job gains might be enough for the Fed to begin tapering its stimulus. Chairman Ben Bernanke said last month that the Fed would slow its bond purchases later this year and end them next year if the economy continued to strengthen.

But Bernanke added that if the economy weakens, the Fed could delay its pullback or even step up its bond purchases again. Several Fed members have since tried to clarify Bernanke's remarks by saying any tapering of the bond purchases would depend on the strength of the economy.

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