US job growth points to labour market strength
WASHINGTON: US job growth surged more than expected last month and employers increased hours for workers.
These are signs of labour market strength that could keep the Federal Reserve on course for a third interest rate increase this year despite benign inflation.
Non-farm payrolls jumped by 222,000 jobs last month, the Labor Department said yesterday, beating economists' expectations of a 179,000 gain. Data for April and May was revised, showing 47,000 more jobs created than previously reported.
While the unemployment rate rose to 4.4 per cent from a 16-year low of 4.3 per cent, that was because more people were looking for work, a sign of confidence in the labour market.
The jobless rate has dropped four-tenths of a percentage point this year and is near the most recent Fed median forecast for this year.
The average work week increased to 34.5 hours from 34.4 hours in May.
Labour market buoyancy could also encourage the US central bank to announce plans to start reducing its US$4.2 trillion (S$5.7 trillion) portfolio of Treasury bonds and mortgage-backed securities in September. - REUTERS