US employers step up hiring in June
WASHINGTON — Employers in the United States created jobs last month at a much faster pace than expected while the unemployment rate held close to a four-year low even as the world’s largest economy weathered the effects of higher taxes and federal budget cuts.
Non-farm payrolls surged 195,000, the Labor Department said yesterday, while the unemployment rate held steady at 7.6 per cent as more people entered the workforce.
Economists had forecast employment to increase by 160,000 and the jobless rate to fall a tenth of a percentage point to 7.5 per cent.
“The job market is stronger. It is a good number, especially with the upward revisions. (Fed) tapering is getting closer,” said Mr Harm Bandholz, the chief US economist at UniCredit Group in New York and the top forecaster of payrolls over the past two years, according to data compiled by Bloomberg.
The stronger job growth came alongside sharp upward revisions to April and May that showed employers added a combined 70,000 more jobs than previously estimated, the Labor Department said. Non-farm payrolls in May grew by 195,000, up from an initially reported 175,000 and expanded by 199,000 in April, compared with an earlier estimate of 149,000.
The surge came despite a two percentage-point increase in the payroll tax that took effect in January and federal budget cuts that began in March, and could draw the US Federal Reserve closer to scaling back its massive monetary stimulus.
Yesterday’s job report was released two weeks after Fed Chairman Ben Bernanke offered an upbeat assessment of the economy and suggested the US central bank could start cutting back on its US$85 billion (S$108.9 billion) in monthly bond purchases later this year.
Private companies accounted for all the job gains in June, with payrolls in the sector increasing by 202,000, led by gains in the hospitality sector, professional and business services, as well as retail trade and healthcare. Government payrolls dropped by 7,000, primarily federal jobs.