WASHINGTON – The U.S. job market picked up speed in June, new government data showed Friday, allaying fears that the economy was headed for a sustained slowdown after a weak start to this year.
Employers added 287,000 jobs in June, up sharply from a meager addition of only 11,000 jobs in May. The June figure was boosted by 35,000 workers at Verizon who were on strike in May but returned to their posts last month.
The official unemployment rate rose to 4.9 percent from 4.7 percent the previous month, though this likely reflected more people seeking jobs.
Earnings also rose, with average hourly earnings for employees on private payrolls inching up to $25.61, a 2.6 percent increase over the year. The labor force participation rate held relatively steady at 62.7 percent.
The strong rebound in hiring in June came on the heels of dismal growth in May. Last month, the Labor Department reported that the U.S. had added only 38,000 jobs in May; this month, it revised the May figures downward to only 11,000 jobs.
Those exceptionally weak figures, combined with relatively anemic growth earlier in 2016 and a strong U.S. dollar, had raised concerns that the U.S. recovery might be decelerating. Britain's decision to leave the EU had also roiled global markets in recent weeks, pushing the pound to its lowest level in decades and raising fears that the volatility could further weigh on company hiring and investment.
But the strong rebound in June suggested that the May figures had stemmed from a statistical anomaly or seasonal trends. June job growth far exceeded analysts' expectations: Economists surveyed by Bloomberg had forecast that the U.S. would add 180,000 jobs to its rolls in June.
Taken together with other growth figures this year, the newly released data suggest that U.S. economic growth is steady as the labor market nears a full recovery from the Great Recession.
"In both 2014 and 2015, average monthly job gains were in excess of 200,000 per month, and I don't think we're necessarily going to see that going forward," said Ryan Wang, an economist at HSBC. "I think we're likely to see job gains a bit closer to 150,000 per month."
The economy added jobs through a broad range of sectors, including hospitality, health care, business services and retail. Employment in construction and manufacturing showed little change.
Even with the recovery in this month's numbers, analysts believe the Federal Reserve remains unlikely to raise interest rates when it meets later this month. While Friday's release will likely make the Fed more confident about labor market conditions, Wang said, the central bank will still be watching for faster economic growth and evidence of inflation before raising rates.
Tara Sinclair, chief economist for job site Indeed, said the Fed may hold off raising rates this year unless economic data in the months to come provide clear evidence that the economy is strengthening.
Analysts said the Fed would also be watching to see what Britain's decision to depart the EU would mean for the U.S. economy. In minutes from a June 14-15 meeting published earlier this week, the Fed said that it would be "prudent" to wait for data on the aftereffects of the Brexit vote before making a decision.
The news sparked immediate speculation that the strong data would become fodder for the 2016 presidential campaign, with analysts saying that Hillary Clinton's campaign could seize on the figures as evidence that the incumbent party has pointed the economy in the right direction.