(MENAFN- AFP) The US economy added a solid 223,000 net new jobs in June, the Labor Department said Thursday in a mixed report on the jobs market.
The unemployment rate fell to 5.3 percent, the lowest level since April 2008, but job creation numbers for the previous two months were revised significantly lower, and there was no upward movement on wages.
Data from the volatile household survey showed the labor force shrank by 432,000 people in the month, largely explaining the 0.2 percentage point fall in the jobless rate.
At the same time, job creation numbers for April and May from the more consistent establishment survey were reduced by a total of 60,000 positions, indicating that the pace of new hiring in US business and government is more moderate than had been thought.
Average hourly earnings were flat from May at $24.95, and up a modest 2.0 percent year-on-year, lower than what most analysts had been expecting after the steady hiring gains of the past year.
Hiring in June was strongest in health care and business services, as has been the case over the past few years, but stalled in construction, the auto industry and government.
There was a drop in the number of long-term unemployed, by 381,000, but much of that could have been people giving up their job search and leaving the active workforce altogether.
Even so, the report confirmed steady if not stunning growth in the US economy and in hiring, with an average of 208,000 jobs generated each month so far this year.
Another sign of the continued tightening in the jobs market was the weekly update Thursday on new claims for unemployment benefits, a sign of the pace of layoffs.
Jobless claims for the week to June 27 were 281,000, up a bit from the previous week but still within the same low range for the indicator of the past nine months.
"The trend in employment growth remains more than strong enough to keep the unemployment rate... trending down, which should eventually lead to more clear-cut acceleration in wages," said Jim O'Sullivan, chief economist at High Frequency Economics.
Ian Shepherdson of Pantheon Macroeconomics said the mixed report does not negate the key issue for the Federal Reserve's monetary policy.
The month-to-month jobs figures, he noted, are "deeply unreliable".
"What counts is the trend in unemployment, which continues to fall rapidly," he said.
With the Federal Reserve poised to begin raising interest rates after holding the benchmark federal funds rate at zero since the crisis in 2008, the steady fall in unemployment is key to them taking the first step, expected as soon as September.
At 5.3 percent, Shepherdson noted, the jobless rate is already inside the Fed forecast for the end of this year, and he predicted that the job reports for the coming months will be stronger than in June.
"Policymakers are now set up nicely to tighten soon on the basis that the labor market is normalizing faster than they expected," he said.
Markets were less bullish about the report. Normally weaker in the face of strong signs for an interest rate hike, the Dow Jones Industrial Average and the S&P 500 were both 0.15 percent higher in mid-morning trade.
Meanwhile the 10-year Treasury yield fell from 2.45 percent to 2.35 percent.
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