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Archive for Saturday, July 7, 2007

Jobless rate holds at 4.5 percent

Companies’ hiring stays solid as 132,000 jobs are added

July 7, 2007

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— Employers added 132,000 jobs, paychecks grew solidly and the unemployment rate stayed at a low 4.5 percent in June, fresh evidence that the once listless economy is regaining energy.

The new snapshot of conditions across the country, released by the Labor Department on Friday, showed that companies have a respectable - albeit not ravenous - appetite to hire and that there are opportunities for job seekers willing to pursue the hunt.

For the national economy, the modest pace of hiring is consistent with business activity that is picking up speed - but not too much - and suggests consumers will have the financial wherewithal to withstand the sting of high gasoline prices. All that bodes well for the country's economic health.

"It is beginning to look as if the early year economic malaise was really just the pause that refreshed," said Joel Naroff of Naroff Economic Advisors. "Job growth in June was decent but nothing spectacular."

The tally of 132,000 new jobs was lower than the robust 190,000 for May. It was sufficient to hold the unemployment rate at 4.5 percent, where it has stood for three months.

Hiring in education, health care, food services and government helped drive overall job growth. Construction companies also expanded employment - even as they coped with fallout from the housing slump. Those gains swamped job cuts in manufacturing, retailing, real estate, legal services, banking and elsewhere.

Employment gains for April and May turned out to be stronger, a development that reinforced economists' belief that the economy rebounded in the second quarter.

Employers added 75,000 more jobs in those two months combined than the government estimated a month ago.

Workers saw modest wage gains in June.

Average hourly earnings rose to $17.38, a 0.3 percent increase from May. Over the past 12 months, wages grew by 3.9 percent. Wage growth supports consumer spending, a major ingredient in healthy overall economic activity. Wage growth probably is outpacing inflation, economists estimate. Still, workers pinched by high gasoline prices may not feel their paychecks are growing as much as they like.

Companies have continued to hire at a decent pace even as the economy has been sluggish. But the strain of the ailing housing market and problems in the automotive industries have clearly been felt. In the first half of the year, job growth averaged 145,000 a month. That was weaker than the average monthly gain of 189,000 for 2006.

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