US employment rebounds in June, calming fears of economic slowdown

WASHINGTON — The U.S. jobs market picked up speed in June, new government data showed Friday, allaying fears that the economy was headed for a sustained slowdown after a weak start to this year.

Employers added 287,000 jobs in June, up sharply from a meager addition of only 11,000 jobs the month before. Though many analysts expected job growth to rebound, they were also waiting to see if the dismal figures from May were repeated, which would be an indication that the economy might be sinking into deeper trouble.

Instead, the latest employment data exceeded forecasts, and a broad range of industries reported job gains. The latest data takes away one source of anxiety even as the U.S. faces potential new threats from Britain’s vote to leave the European Union. Already, so-called Brexit has led to a sharp decline in the value of the pound and a large appreciation of the U.S. dollar, which will make it more difficult for American companies to sell overseas.

“At first blush, it’s a big exciting jobs number, and really reassuring after last month’s number,” said Tara Sinclair, chief economist for job site Indeed and a professor at George Washington University.

Other figures released Friday told a more nuanced story. The official unemployment rate rose to 4.9 percent from 4.7 percent the previous month, a trend that might sound negative for the economy, but largely reflected more people looking for jobs.

Wages also grew at one of the fastest paces since this cycle of economic expansion began in 2009, rising 2.6 percent in June from the previous year. Yet economists said that level of wage growth, while welcome, is still not strong enough to indicate a labor market where companies are competing vigorously for employees.

Despite the strong jobs numbers, analysts say the Federal Reserve remains unlikely to raise interest rates when it meets later this month. Fed officials had already signaled they would not raise rates at the meeting after May’s weak report and amid the Brexit fallout. A weak June report might have dashed any possibility of raising rates at any point this year, but the strong numbers could keep a rate hike on the table.

In its report, the Labor Department also revised upward job growth for April and revised downward the already-dismal figures for May. Last month, the department reported that the U.S. had added only 38,000 jobs in May; on Friday, it lowered that figure to 11,000.

Economists said the weak growth in May likely stemmed in part from a statistical anomaly or seasonal trends. A temporary strike by 35,000 workers at Verizon exacerbated the monthly rebound, removing the workers from the rolls in May but adding them back in June.

Many economists cautioned that a single month’s readings can be volatile, and that the data should be interpreted as part of a longer-run trend. Taken together with other growth figures this year, the newly released job data indicate that U.S. economy is expanding steadily, though not surging, as the labor market gradually moves closer to a full recovery from the recession.

The U.S. economy is now on pace to add 172,000 jobs a month on average in 2016, a figure that is down from 2015, which was in turn less than 2014. Labor Secretary Thomas Perez said in an interview that is what is expected as the jobs market fully heals.

“We’re not at full employment yet,” he said. “But the closer you get … the pace of job growth slows, and the pace of wage growth hastens.”