U.S. employers continue robust hiring pace

U.S. employers added a robust 222,000 jobs in June, the most in four months, a reassuring sign that businesses may be confident enough to keep hiring despite a slow-growing economy.

The unemployment rate ticked up to 4.4 percent from 4.3 percent in May, which was a 16-year low, the Labor Department said Friday. The jobless rate rose because more Americans began looking for work and not all of them found it.

The government also revised up its estimate of job growth for April and May by a combined 47,000. In the first six months of this year, hiring has averaged nearly 180,000 jobs a month, only slightly below last year's pace.

Yet even with the strong hiring, average hourly pay rose in June by just 2.5 percent from a year earlier. That's below the 3.5 percent pace typical of a healthy economy.

Friday's figures suggest that after eight years of a grinding but resilient recovery, American businesses still have room to hire at a healthy pace. The rate of job growth has slowed since peaking in 2014 and 2015. But it is still strong enough to pull in workers who had previously stopped looking for work. The proportion of adults who have jobs ticked up to 60.1 percent, just below April's figure, which was the highest since the recession ended in 2009.

The solid hiring and the increase in people seeking work signal that economic growth should be decent, if not robust, through 2017, said John Silvia, chief economist at Wells Fargo.

"It's a good report for the economy," he said. "It really does say that we've got 2 percent-plus growth for the second half of the year."

Still, the job market's advancement has yet to compel employers to offer higher pay across the board. Businesses advertised 6 million open jobs in May, a record high, which suggests that they are struggling to find the workers they need. Normally, as the number of unemployed dwindles, employers raise pay to attract job seekers.

Yet the influx of job seekers last month might have offset some upward wage pressures. Employers had more applicants to choose from.

Many industries stepped up hiring in June. Health care posted the biggest job gain — 59,100 — despite uncertainty around health care legislation in Congress. Governments added an unusually high 35,000 positions, nearly all of them at the local level. Construction companies added 16,000, and mining, which includes oil and gas drilling, gained 8,000.

Restaurants and hotels added a healthy 36,000 jobs. Professional and technical services, which includes such higher-paying occupations as engineering and accounting, gained 19,000.

Friday's jobs figures arrive against the backdrop of a mixed picture of the U.S. economy.

Home sales are chugging along, though a shortage of properties for sale suggests that the pace of purchases could flag. The number of people signing contracts to buy homes — step that precedes final sales by a month or two — has fallen for three straight months.

And auto sales are slowing from last year's record pace, causing some automakers to cut jobs.

At the same time, surveys of manufacturing and service companies indicate that growth in both sectors may be accelerating. Factory activity is expanding at the fastest pace in three years, the Institute of Supply Management, a trade group of purchasing managers, found.

The economy grew at just a 1.4 percent annual rate in the first three months of the year, below even the sluggish 2 percent average pace in the eight years since the recession ended. But most economists have forecast that growth rebounded in the April-June quarter to an annual rate of 2.5 percent or higher.

Still, the economy appears resilient enough for the Federal Reserve to keep raising its benchmark interest rate. The Fed has signaled its belief that the economy is on firm footing as it enters its ninth year of recovery from the recession, with little risk of a recession.

Consumers have expressed confidence in the economy and, accordingly, are spending more than they did in the first three months of the year. But they are displaying caution about their spending, which barely rose in May.