WASHINGTON (AP) — U.S. employers added a robust 195,000 jobs in June and many more in April and May than previously thought. The job growth suggests a stronger economy and makes it more likely the Federal Reserve will slow its bond purchases before year's end.
The unemployment rate remained 7.6 percent because more people started looking for jobs — a healthy sign — and some didn't find them. The government doesn't count people as unemployed unless they're looking for work.
Still, hiring "continues to look more than strong enough to keep unemployment trending down ... and probably more than strong enough to lead to Fed tapering starting in September," said Jim O'Sullivan, chief U.S. economist at High Frequency Economics.
The Fed's bond purchases have kept borrowing rates low to encourage borrowing and spending. A pullback in its bond buying would likely send rates up.
Pay also rose sharply last month and is outpacing inflation, the Labor Department's monthly jobs report Friday showed. Average hourly pay rose 10 cents in June to $24.01. Over the past 12 months, it's risen 2.2 percent. Over the same period, consumer prices have increased 1.4 percent.
Stocks opened sharply higher before erasing most of their gains by late morning. And the yield on the 10-year Treasury note jumped from 2.56 percent to 2.7 percent, its highest level since August 2011. That's a sign that investors think the economy is improving.
The economy has added an average 202,000 jobs a month for the past six months, up from 180,000 in the previous six. Hiring and consumer confidence have risen despite higher taxes and federal spending cuts that kicked in this year.
Friday's report showed the economy added 70,000 more jobs in April and May than the government had previously estimated — 50,000 in April and 20,000 in May. Average hourly pay rose 10 cents to $24.01, 2.2 percent higher than a year ago.