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June jobs report: Hiring beats expectations

Friday, July 5, 2013 - 8:40am

The job market made solid improvement last month, with strong hiring that beat expectations.

The economy added 195,000 new jobs in June, the same as the revised pace in May. Meanwhile, the unemployment rate remained unchanged at 7.6%.

Economists polled earlier in the week by CNNMoney had predicted a gain of 155,000 jobs, and a drop in unemployment to 7.5%.

Hiring during spring was also stronger than previously thought. The number of jobs created in April was revised up by 50,000 positions, while the May report was revised higher by 20,000 jobs.

The biggest gains were in leisure and hospitality (up 75,000), professional and business services (up 53,000), and retail (up 37,000). Construction and manufacturing were little changed.

The federal government shed 5,000 positions, continuing a trend brought on by the budget cuts that have eliminated 65,000 jobs in the last 12 months.

Friday's jobs report is being watched particularly closely by investors, in light of recent comments from Federal Reserve Chairman Ben Bernanke that caused wild swings in the markets.

Stocks added to earlier gains following the report, while bonds sold off.

The S&P 500 is down nearly 3% since May 22, when clues first emerged that the Fed may slow purchases of bonds and mortgages as early as this year. Bernanke later said the stimulus program could end altogether if unemployment hits 7% -- which the Fed expects by the middle of next year.

On average, the economy has created roughly 182,000 jobs a month over the last year. That's not bad, but it's not great either. Economists say that level of job growth barely keeps pace with the rising population, and is a far cry from the 250,000 jobs a month created during the boom times of the mid 1990s.


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