The labor markets kept rolling in June, as job creation easily topped forecasts for the month on the back of 222,000 new jobs being added to the workforce. An additional 39,000 jobs were added in the preceding months on strong upward revisions.
Despite those solid gains, the unemployment rate edged modestly higher to 4.4 percent, after reaching its lowest level in a decade at 4.3 percent in May. Solid labor market conditions are drawing people back into the workforce, a trend that could slow the pace of decline in the jobless rate, but provide an additional boost to the pool of available talent for employers.
Economists have been long expecting stronger wage gains to emerge as the pool of unemployed dissipates and the competition for skilled labor heats up. That component of the labor market recovery has proven to be elusive, but there are still signs of gradual improvement there as well. Average hourly earnings increased by 2.5 percent over the past twelve months, while average weekly earnings were boosted by 2.8 percent on a slight uptick in average hours worked. Against the backdrop of very low inflation, wage growth has been positive, but still appears to have room for further improvement.
It seems like a bit of a broken record, but compared with any number of other gauges of the strength of the economy, labor market conditions have been a relatively consistent bright spot that should be expected to contribute to the virtuous cycle of economic expansion.
Among other conditions, stronger labor market conditions have emboldened consumers, supporting a generally positive outlook on the economy. While that hasn’t translated to robust spending of late, particularly on retail goods, an upbeat consumer who is also supported by stronger income growth should continue to provide a solid underpinning to the economy as a whole.
The bottom line is that jobs are out there, and job hunters with marketable skills are in a good position to move on or move up.