The U.S. non-farm payroll report showed a gain of 223K in June – close to market expectations. The ADP report estimated an increase of 237K jobs and the market expectations were at 231K, for June. The main sectors that expanded their jobs were in professional and business services, health care, retail trade, financial activities, and in transportation and warehousing. The rate of unemployment slipped to 5.3%. The U.S. dollar slightly declined against the Euro, and gold and silver inched down.
Even though the report showed a gain of 223K, which wasn’t far off market expectations and the unemployment rate slipped to its lowest level in years, the other measurements of this report weren’t that impressive including in downward revisions for previous months, decline in participation rate and no growth in wages.
In June, the rate of U.S. unemployment is 0.8 percent points below the rate recorded in June 2014.
Moreover, the number of unemployed persons (8.299 million) fell by 375K in June compared to the previous month. But the civilian labor force also fell by 432K. So there was a fall in number of people participating in the labor force and in the number of unemployed – not a good sign for the labor market; the participation rate declined to 62.6%.
Finally, wages remained flat for June compared to May – the hourly earnings was still at $24.95 per hour; wages are 2% higher than the same month back in 2014. If wages don’t pick up, this could indicate the labor market isn’t improving.
The total non-farm payroll in May and April was revised down by a total of 60K than previously reported.
The news about the jobs report didn’t seem to lead to a strong reaction in the markets perhaps on account of the jobs report coming close to market estimates, the ongoing developments about Greece, and low trading volume in the U.S. on account of U.S. holiday. Gold and silver prices slipped down on Thursday.
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