The nation’s unemployment rate fell 0.2 of a percent point in June to 5.3%, its lowest rate since April 2008, while 7,400 jobs were added in the for-hire trucking sector.
The wider transportation and warehousing sector saw 17,100 job additions.
According to a new Labor Department report, 223,000 non-farm jobs were added in June.
The overall increase was less than the 254,000 jobs added in May, which has been downwardly revised from 280,000. However, it was above April’s level of 187,000, revised downward from initially reported 221,000.
The June increase compares with an average monthly gain of 250,000 over the prior 12 months. Job gains during the month occurred in professional and business services, health care, retail trade, financial activities and transportation and warehousing.
On the downside, the report showed the labor participation rate in the country hit a 37-year low, meaning a lot of people have either given up looking for work or simply aren’t working. Average hourly wages rose at an annual rate of just 2% in June, barely ahead of government inflation numbers.
While the report was described as positive by Lindsey Piegza, chief economist at the investment firm Stifel, it also suggests significantly less momentum than previously anticipated heading into the second half of the year.
“The sizable drop in the unemployment rate was welcome, at least on the surface, but rather reflects a continued exodus of workers, with nearly half a million Americans saying, ‘Right now conditions in the U.S. labor market are so bad, I’m not going to bother looking for work.’ Remember, you have to be actively seeking employment to be counted as unemployed, thus, it is very easy to get the unemployment rate down to zero if no one is looking for a job,” she said.
Furthermore, Piegza said the anticipated rise in wages appears to have been “arrested with no growth at the end of June and the larger-than-expected increase in May partly revised away, leaving annual wages stagnant at 2% as they have been for the last 5 plus years.”
Factory orders and shipments
A separate report released Thursday by the Commerce department showed declines in new factory orders and shipments during May.
The full report, an update from an earlier advance one, showed new orders for manufactured goods fell 1% from the month before, the ninth drop out of the last 10 months.
New orders for manufactured durable goods fell 2.2%, more than the previously published 1.8% decline, and the third drop out of the last four months. It was led by a 6.5% decline in new transportation orders, also down three out of the last four months.
Shipments of manufactured goods fell 0.1% in May following a virtually unchanged April drop, while shipments of manufactured durable goods declined 0.3%, down from the previously published 0.1% drop, and the fourth decline out of the last five months.
It was led by a decline in transportation shipments, falling 0.9%, also down four out of the last five months.
Orders for non-defense capital goods excluding aircraft, an indicator of future business investment, were revised down to show a drop in May after a gain was earlier reported. Another key indictor, shipments of core capital goods. was revised down similarly.
However, there are other signs that the nation’s manufacturing sector may be starting to pick up some steam after being disappointing much of this year.
Earlier this week a survey of the nation’s supply management executives said factory activity hit its best level in five months.
These reports follow one from Thursday showing U.S. construction spending in May rose 0.8% from April, hitting its highest level since October 2008, according to the U.S. Commerce Department.
It said private construction spending also reached its highest level since July 2008 while spending on non-residential private projects was the best since December 2008 while public outlays for construction hit a seven-month high.