US jobless claims rise slightly, labour market improving

WASHINGTON (AFP) - The US jobless rate fell to 6.1 percent in June as the economy pumped out a much better-than-expected 288,000 net new jobs, the Labor Department said Thursday.

With new jobs figures for the two prior months revised upward by 29,000 extra jobs, the data provided a picture of a solidly growing economy. Job creation has averaged 231,000 a month since January, the best six months since the end of the 2008-2009 recession.

Down from 6.3 percent in May, and 7.5 percent a year ago, the unemployment rate was at its lowest level since September 2008.

Jobs gains were broad-based across industries, with a surge as well in government hiring, a sector that has overall continued to pare jobs since the economic crisis.

But there was a key exception to the gains. The construction industry lagged with only 6,000 new jobs, a poor showing for a sector expected to continue driving growth.

The total number of officially unemployed fell by more than 300,000 to 9.4 million, with only a slight uptick in the number of those not in the labor force, another sign of strength in the economy.

"The steady stream of positive June US data continues, with the key report - hiring - the icing on the cake," said Jennifer Lee at BMO Capital Markets. Another sign of strength was the continued fall in the number of long-term unemployed, a group that has particularly worried policy makers who fear they will forced to drop out of the work force permanently.

People out of work for more than 27 weeks fell by nearly 300,000 to 3.1 million, compared with 4.3 million a year ago. But on the down side, the data also showed an increase in the number of those forced to work part-time because they cannot find full-time jobs, by 275,000 to 7.5 million.

In addition, the workforce participation rate remained at a low 62.8 percent, compared with 66 percent on the eve of the recession, a sign that the pace of hiring has not yet been strong enough to pull people who dropped out of the workforce back in. Workers' hours were unchanged, and hourly wages continued to grow at a slow pace, up just 2.0 percent over a year.

Even so, analysts called the jobs data solid confirmation that the winter contraction in the economy was an aberration and that it remains on track for steady, if only moderate, growth. "The labor market was already showing clear improvement but it has accelerated further in recent months," said Jim O'Sullivan, chief US economist at High Frequency Economics. "For now, the wage data remain tame, but it is unclear how long that will last."

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