As the number of jobs increased in June, the unemployment rate rose to 4%, according to the latest report on the situation of employment published by the US Bureau of Labor Statistics.
According to the report, the number of unemployed rose by 499,000 to 6.6 million. This is down from last year when the number of unemployed was 7 million.
Unemployment rates for all other groups including men at 3.7%, teens at 12.6%, whites at 3.5%, blacks at 6.5%, Asians at 3.2 % and Hispanics at 4.6%, all changed little to no change over the month.
Total non-farm payroll employment increased by 213,000 in June and increased by 2.4 million over the past 12 months.
The majority of job gains in June can be attributed to an increase in jobs in professional and business services, manufacturing and health care.
Here are some of the areas that showed major changes in June:
- Employment in professional and business services increased by 50,000
- Employment in the manufacturing sector increased by 36,000
- Health Care Employment increased by 25,000
In June, retail trade lost 22,000 jobs, largely reversing a gain of 25,000 in May.
Employment was little changed over the month in the other major industries, including wholesale trade, transportation and warehousing, information, financial activities, recreation and hospitality, and public administration.
The average working week of all employees in the non-agricultural private sector remained unchanged at 34.5 hours in June. The average hourly wage increased by $0.05 to reach $26.98.
The reduction in the number of unemployed Americans could offer some relief to the housing industry.
“If the unemployment rate continues to remain low, companies could continue to push wage increases, which could offer some relief to homebuyers, real estate agent.com said chief economist Danielle Hale.
“There are more than 15% fewer entry-level homes under $200,000 on the market this year than there were last. In contrast, there are slightly more $350,000+ homes on the market than last year,” Hale continued. “If the increases help buyers move beyond entry-level homes, it could lead to a better match between homebuyers and available homes.”
However, wages have not caught up with the influx of jobs, which could still prove a challenge for owners.
“Wages rose 2.7% year over year, unchanged from the previous month. Despite low unemployment rates, wages continue to disappoint,” LendingTree Chief Economist Tendayi Kapfidze. “The increase in the rate of participation in the labor market can give an idea of the reason. The large pool of people available to enter the labor market is a drag on wages because it reduces the bargaining power of workers who are already employed.
But the report offers some optimism for the construction industry, with construction employment rising by 13,000 jobs in June. It is now up 282,000 on the year.
“The increase of nearly 4,000 residential construction jobs this month compared to May, an increase of 0.5%, sends a positive message to home buyers and the housing market, as it indicates that further increases in housing starts are likely and that housing supply could be greater.”, First American said chief economist Mark Fleming.