US employment growth jumped last month and the jobless rate closed in on a six-year low, decisive evidence the US economy was growing briskly heading into the second half of the year.
Non-farm payrolls increased by 288,000 jobs last month, and the unemployment rate fell to 6.1 percent from 6.3 percent in May, the US Department of Labor said on Thursday. Data for April and May were revised to show a total of 29,000 more jobs created than previously reported.
In addition, the ranks of the long-term unemployed shrank and the share of Americans with a job hit its highest level since August 2009. Job gains were widespread across sectors, and there were few signs of inflationary wage pressures.
“It’s a strong report, there is no question about it. The labor market is improving at a seemingly stronger rate than before, the slack is being absorbed, we are chipping away,” said Josh Feinman, head global economist at Deutsche Asset & Wealth Management in New York.
Employment has now grown by more than 200,000 jobs in each of the past five months, a stretch not seen since the technology boom in the late 1990s. That added to signs a plunge in economic output in the first quarter was a weather-driven anomaly.
Job growth averaged 231,000 per month in the first half of the year, the best start since 2006.
US stocks rose on the data, with the Dow Jones industrial average closing above the 17,000 threshold for the first time. Prices for US Treasuries fell and the US dollar advanced against a basket of currencies, as traders bet on an earlier interest rate hike from the US Federal Reserve.
Rate futures moved to show a 58 percent probability of an increase in June next year, up from 51 percent. JPMorgan moved up its forecast for a rate hike to the third quarter of next year from the fourth quarter, while Goldman Sachs acknowledged it could come sooner than its call for the first quarter of 2016.
“With additional, similar reports in the coming months, we believe the timing of the Fed policy turning point could be moved from late in 2015 to earlier in the year,” said Doug Handler, head US economist at IHS Global Insight in Lexington, Massachusetts.
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