The American labor market added 222,000 jobs last month

Despite the creation of new jobs, the unemployment rate increased from 4.3 percent to 4.4 percent

By Matthew Rozsa

Staff Writer

Published July 7, 2017 12:23PM (EDT)

 (Mike Orazzi/The Bristol Press via AP)
(Mike Orazzi/The Bristol Press via AP)

The American economy continues to create jobs at a robust pace, although there are potentially problematic signs in the offing.

The Labor Department released its economic figures on Friday, according to a report by The New York Times. The U.S. economy added 222,000 jobs in June — nearly 50,000 more than the 175,000 jobs they were anticipating. Because more people joined the workforce, the unemployment rate increased slightly from 4.3 percent to 4.4 percent, although that isn't the figure that has some economists worrying.

As Jim O'Sullivan, the chief United States economist for High Frequency Economics, told The Times, "The payroll number is well above expectations. But the wage numbers are certainly weaker than expected, so it keeps alive the whole debate about the relationship between slack and inflation and how far the Federal Reserve should allow the unemployment rate to fall."

Indeed, the average hourly rate only grew by 2.5 percent from a year earlier, which is considered to be on the low side.

Similarly, when the number of unemployed Americans is expanded to include discouraged workers and those who are working part time but want to work full time, the number increased from 8.4 percent in May to 8.6 percent in June.

This may explain why the U.S. Bureau of Labor Statistics reports that 1.7 million Americans have remained unemployment for at least six months, with many of them struggling to find new jobs due to a skills gap, according to a report by CNBC. By contrast, DS Economics founder Diane Swonk says that the new hiring reflects the good luck of millennials who are just graduating from college, telling the Times that "finally the millennials are getting more jobs."

By Matthew Rozsa

Matthew Rozsa is a staff writer at Salon. He received a Master's Degree in History from Rutgers-Newark in 2012 and was awarded a science journalism fellowship from the Metcalf Institute in 2022.

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