WASHINGTON: U.S. job growth was stronger than expected in June and the employment count for the prior two months was revised higher, showing the economy on solid ground and likely keeping the Federal Reserve on track to scale back its massive monetary stimulus later this year. Employers added 195,000 new jobs to their payrolls last month, the Labor Department said Friday, while the unemployment rate held steady at 7.6 percent as more people entered the workforce.
The government revised payrolls for April and May to show 70,000 more jobs created than previously reported.
Economists had expected employment to increase 165,000 last month and the jobless rate to fall a tenth of a percentage point to 7.5 percent.
?The strong advance in the employment count provides support for the Federal Reserve to start to taper back on its quantitative easing in the near future,? said Kathy Bostjancic, director of macroeconomic analysis at the Conference Board.
The closely watched employment report was released two weeks after Fed Chairman Ben Bernanke offered an upbeat assessment of the economy?s outlook and said the U.S. central bank expected to start trimming its bond purchases later this year.
U.S. stock index futures added to their gains on the report. Prices for U.S. Treasury debt extended losses, while the dollar rose against the yen.
Job growth averaged 196,333 per month over the last three months, closer to the 200,000 jobs that economists say the Fed is seeking.
The employment report also showed weekly hourly earnings rose by the most since November. That, together with other relatively upbeat data on housing, auto sales and manufacturing, makes it more likely the Fed will proceed with its tapering plan.
The Fed is purchasing $85 billion in bonds each month in an effort to keep borrowing costs down and spur stronger growth.
Twenty-eight of 60 economists polled by Reuters in late June said they expect the Fed to begin dialing back its purchases in September, with most expecting the program to end by June 2014.
The majority also forecast the Fed initially would cut purchases by $20 billion a month.
The recent signals from Bernanke that a start date for reducing bond purchases is approaching triggered a global sell-off in stock and bond markets, which have come to rely on the Fed as a steady source of demand for financial assets.
Interest rates on everything from U.S. Treasury debt to home mortgage loans moved sharply higher, threatening to curtail credit for consumers and businesses.
The central bank is closely watching the unemployment rate. It has said it expects the jobless rate to drop to around 7 percent by the middle of next year, when it anticipates ending the bond purchases.
The jobless rate was unchanged last month because the labor force swelled ? a sign of confidence in the jobs market.
The third consecutive month of increase in the workforce lifted the participation rate ? the share of working-age Americans who either have a job or are looking for one ? further away from a 34-year low touched in March.
Declining participation as older Americans retire and younger people give up the hunt for work in frustration has accounted for much of the drop in the unemployment rate from a peak of 10 percent in October 2009.
All the job gains in June were in the private sector, where payrolls increased by 202,000 after rising 207,000 the prior month.
Government employment, in contrast, dropped 7,000 jobs after falling 12,000 in May. Economists, however, say the job losses are probably not due to the deep government spending cuts known as the sequester as most agencies are relying on furloughs.
Consumer-related areas such as retail and wholesale trade showed further gains in employment in June, reflecting strengthening demand that was highlighted by a surge in automobile sales. Retail jobs increased 37,100 last month after advancing 26,900 in May.
Manufacturing payrolls fell by 6,000 jobs, declining for a fourth straight month. Construction employment rose 13,000 adding to May?s 7,000 jobs as the housing recovery pushes ahead, but it remains constrained by a still sluggish nonresidential sector.
Hiring in the health care and social assistance sector, increased 23,500 after slowing in May. Temporary help rose 9,500 after adding 23,600 jobs in May.
Other details of the report showed average hourly earnings rose 0.4 percent or 10 cents. In the 12 months through June, earnings were up 2.2 percent, the largest increase since July 2011. Tepid wage growth has been holding back the consumer-driven economy.
The length of the average workweek held steady at 34.5 hours for the third straight month.
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