WASHINGTON – Hiring increased in June in a surprising display of US economic vitality eight years after the resumption of the big recession. However, profits remain low wages, clearly recalling one of the major weaknesses of the economy.
Employers added 222,000 jobs last month and hiring in the previous two months was revised much higher. Earnings in employment now average about 180,000 per month this year, only slightly below the pace of last year.
The unemployment rate rose from 4.4% to 4.3%, but especially for good reason: more Americans started looking for work, a sign of confidence in the economy.
Last month, economists fear that hiring will be slower as employers struggled to fill jobs by reducing the supply of unemployed. Friday’s data suggests that companies are still many people to hire.
This gave senior economists confidence that the economy still had room for maneuver.
“This balanced pace should keep the current economic expansion far beyond the historical norm,” said Russell Price, an economist at Ameriprise Financial.
So far, the labor market and the economy seem almost identical to last year’s, although President Donald Trump boasted that his policies hiring and accelerating growth.
The sustainability of the economy seems to benefit more people. The unemployment rate among blacks fell in June to its lowest level in 17 years, to 7.1 percent.
The gap with whites, the rate was 3.8 percent, persisted. The rate among Latinos dropped to 4.8 percent, the lowest in 11 years.
Even with strong recruitment in June, the average hourly wage rose only 2.5% compared to the previous year. The last time the unemployment rate was low, wages increased by 4%. Normally, as the number of declines in unemployment, employers raise wages to attract job seekers.
Economists offer a number of explanations as to why this process has not yet been launched. One factor is the influx of job seekers last month – who had already been on the bench, not counted as unemployed – could offset some rising wage pressures. The bosses were more candidates to choose.
Mark Zandi, chief economist at Moody’s Analytics, said many workers are too cautious to push to increase, partly because of the lingering effects of the big recession, while nearly 9 million people have lost their jobs.
And some companies have decided that they can not raise the prices of significant wage increases. This cycle of limited wage increases and low prices has kept inflation under control.
John McAuliffe, CEO of Sylvan Learning, a company that provides mentoring to students from preschool to high school hiring more teachers and is developed. However, it reduces the costs of maintaining profits, rather than raising prices.
The company opened 10 new locations since March, creating hundreds of jobs, mostly part-time. “More people have the ability to provide tutoring for their children,” McAuliffe said.
However, the company has little need to raise wages. “Many teachers who want to earn additional income,” he said. “We’ve always been able to find it.”
Economists predict that the economy will grow at a rate of around 2% this year, almost as if it has increased since the end of the crisis.