The jobs market revived in June, as payroll gains made their largest advance in eight months, greatly exceeding expectations and offsetting worries of a larger, troubling trend for American labor.
"It's a great report, it's nice to see that it made last month an anomaly and not a trend," said JJ Kinahan, chief strategist at TD Ameritrade, referring to the May report, which showed shockingly poor job additions.
The U.S. added 287,000 last month, the Labor Department reported Friday, substantially higher than consensus estimates calling for an addition of 180,000 jobs in June. The unemployment rate edged up to 4.9 percent. Wage growth, however, rose a tepid 2 cents, or 0.1 percent, for the month, but the longer-term trend was positive, with wages up 2.6 percent from the year earlier.
Wage growth during most of the recovery remained stagnant, so the recent uptick in pay suggests slack in the labor market is decreasing.
The monthly wage increase "was subdued, but pointing in the right direction," Kinahan said. "It's a good trend year-over-year, so this keeps us to the positive side of the ledger, but not to the level that we'd like."
Job growth came in leisure and hospitality, healthcare and social assistance and financial activities. Employment also increased in information, the government said, attributing the rise as largely reflecting the return to work in late May of 39,000 Verizon workers after a six-week strike.
Given the still-unknown impact of the recent vote by U.K. citizens to depart the European Union, the mostly upbeat report was viewed by some as unlikely to change the cautious stance by the Federal Reserve as it ponders its next increase in interest rates.
"If it wasn't for Brexit, today's report would have brought into play an interest rate hike as early as September," emailed Tara Sinclair, chief economist for the job site Indeed. "As things stand, Janet Yellen and the Fed could be holding off for the rest of the year unless job gains and wage growth surprise to the upside in coming months."
But not all agreed. Andrew Hunter, assistant economist at Capital Economics, said so long as the next two reports offer further evidence of a healthy employment market, Friday's data support "the view that the next hike could still be in September."
Revisions for the prior two months were a mixed bag, with April revised up to 144,000 jobs, from an initial count of 123,000, while the May number was revised downward to 11,000 from 38,000. With these revisions, employment gains in April and May combined were 6,000 less, on net, than previously reported.
"A three-month-average job gain of about 150,000 doesn't scream rate hike in light of what is going on overseas and in the context of a slowing trend," Peter Boockvar, chief market analyst at the Lindsey Group, emailed.
Over the past 3 months, job gains have averaged 147,000 per month.
Wall Street embraced the labor report, with benchmark indexes up nearly 1 percent.