ARLINGTON, Va.—The latest jobs report–with 213,000 jobs gained June – revealed strong job growth and improved labor force participation. But NAFCU Chief Economist and Vice President of Research Curt Long noted that wage growth continues to lag.
"The latest employment report showed strong job growth for June, plus upward revisions to prior months," said Long. "The increase in the unemployment rate was due to improved labor force participation. Wage growth remains stuck below 3%, which will provide some reassurance to the Fed that inflationary pressures remain relatively muted."
The unemployment rate increased to 4% in June as the labor force expanded by 601,000 workers.
The Federal Open Market Committee (FOMC) raised the federal funds target rate by a quarter-point to a range of 1.75% to 2% percent during its meeting last month. The FOMC’s next two-day monetary policy meeting is set for Jul 31-Aug. 1.
Hourly Earnings up Five Cents
In other report data, private-sector payroll employment increased 202,000 jobs during June. The goods-producing sector increased 53,000 jobs, while the service sector increased 149,000 jobs. Public sector employment increased 11,000 from the prior month, noted Long.
Average hourly earnings increased five cents to $26.98 in June. Over the last 12 months, wages are up 2.7%. Since 2009, year-over-year wage growth has averaged just 2.3%, Long added.