July 03, 2014

Unemployment drops, labor force expands in June

July 7, 2014 – The unemployment rate dropped from 6.3 percent to 6.1 percent in June as the labor force grew by 81,000 workers.

Thursday's data showed non-farm payrolls increased by 288,000 in June. Results for both May and April were revised upward.

NAFCU Senior Economist Curt Long, who analyzed data from the Bureau of Labor Statistics for a NAFCU Macro Data Flash, found that while the business services sector grew the most, many job gains were concentrated in lower-paying sectors such as retail and leisure and hospitality.

"The strengthening in the labor market is a welcome development, but at this point it is unlikely to alter the Federal Reserve's plans for increasing short-term rates," Long wrote. (The Federal Open Market Committee has kept the federal funds target rate at a range of 0 to 0.25 percent since 2008.)

Total private-sector employment went up by 262,000 in June, and the business services sector went up by 67,000 jobs. Retail saw an increase of 40,000 jobs, and the leisure and hospitality sector had an increase of 39,000 jobs. The job gains were broad-based, with the diffusion index (a measure of how many sectors saw job growth) rose from 62.9 in May to 64.8 in June.