Employers Hiring at Strong Pace

By Toni Vranjes

July 5, 2013

The U.S. economy created 195,000 new jobs last month — and the employment gains for April and May were larger than previously reported.

A particularly strong category was professional and business services, which added 53,000 jobs. Other areas of employment growth included bars and restaurants, retail trade, and health care. However, manufacturing lost 6,000 jobs, and government employment declined by 7,000, the Labor Department reported today.

Meanwhile, the nation’s unemployment rate remained at 7.6 percent in June, as the labor force expanded by 177,000. In addition, the number of “long-term unemployed” — those out of work for 27 weeks or longer — dropped from 4.4 million to 4.3 million.

Another positive sign: the government’s upward revisions to its payroll estimates for April and May. For those two months combined, the economy added 70,000 more jobs than previously reported.

But other news was discouraging. Last month, the nation’s “underemployment rate” jumped from 13.8 percent to 14.3 percent, according to the report. This includes discouraged people who have stopped looking for jobs, as well as part-time workers who want full-time employment.

The report showed a 322,000 increase in the number of people working part-time for “economic reasons” — also known as “involuntary part-time workers.”

In a blog post, Mesirow Financial economist Diane Swonk highlighted the robust job growth in leisure, hospitality and retail. She noted that these sectors could see “some increased hiring but reduced hours as employers try to keep weekly hours below the 30-hour-threshold trigger for employer-provided healthcare under the Obamacare law.”

Swonk concludes that the overall jobs picture is mixed.

“The upside surprise to payroll employment, along with upward revisions to previous months, is welcome news,” she wrote. “Everyone would rather see an economy that can generate jobs without as much support from monetary policy. That said, the quality of jobs matters as well as the quantity of jobs we are creating; on that front, we are still falling short.”

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