US jobs growth surges

The United States added a robust 195,000 jobs in June, and job growth in prior months was revised higher, the Labor Department reported Friday. The June employment gain was well above the analyst consensus estimate of 166,000 jobs, and marked a steady pickup in job creation in the economy. In a further encouraging sign, the Labor Department revised April and May jobs numbers higher, saying the combined gains in those months were 70,000 higher than previously estimated. Overall the first six months of 2013 averaged 201,000 net new positions per month, compared with 185,000 in the year-ago period. Meanwhile the unemployment rate held steady as expected in June at 7.6 percent, as the number of people in the work force continued to rise, the department said. The better-than-expected June jobs report raised hopes for a stronger economy and expectations that the Federal Reserve will begin to reduce its massive quantitative easing (QE) stimulus program soon. In mid-May Fed Chairman Ben Bernanke said the bank could start to taper the $85 billion a month asset purchases if the economy continued to improve. "Given Bernanke's penchant to judge job growth from the 6-month average, he is likely to see this report as evidence of economic strength, both a vindication of QE and a reason to start curtailing it," said Chris Low of FTN Financial. US stocks opened solidly higher after the jobs data was released, with the broad-based S&P 500 index up 0.6 percent in the first 20 minutes of trade. But bond yields also rocketed on the prospect of early Fed tightening.The 10-year Treasury, a key benchmark for commercial interest rates, rocketed to 2.70 percent from 2.50 percent, its highest level since mid-2011. The private sector continued to drive job growth in the world's largest economy, adding 202,000 positions, the Labor Department data showed. The government cut 7,000 jobs, 5,000 of them at the federal level, in part reflecting the ongoing sequester spending cuts that began on March 1. The most robust job growth -- 75,000 new jobs -- was in the leisure and hospitality sector, which has been making a strong comeback over the past 12 months amid a modest economic expansion. In that sector, 52,000 jobs were added in food services and drinking places, the department said. Other leading gains were in professional and business services, up 53,000 jobs, retail trade (+37,000), health care (+20,000) and financial activities (+17,000). The number of people unemployed was 11.8 million, up a slight 17,000 from May. In the private sector, the average workweek remained unchanged in June at 34.5 hours, while the average hourly earnings rose 10 cents, to $24.01. Over the past 12 months, average hourly earnings are up by 51 cents, or 2.2 percent.