WASHINGTON — U.S. employers added a solid 223,000 jobs in June, and the unemployment rate fell to 5.3 percent, a seven-year low. But wages failed to budge, and other barometers of the job market paint a mixed picture.
The unemployment rate fell from 5.5 percent in May, the Labor Department said Thursday. But the rate fell mostly because many people out of work gave up on their job searches and were no longer counted as unemployed.
In addition, the percentage of Americans working or looking for work fell to a 38-year low, a possible sign of more discouraged job seekers. And employers added 60,000 fewer jobs in April and May combined than the government had previously estimated.
The figures capture the persistently uneven nature of the job market's recovery from the Great Recession. More people had begun looking for work in May, yet all those gains were reversed in June. And wages, which had shown signs of finally rising earlier this year, have now stalled.
Construction companies failed to add any jobs in June after hiring 15,000 in May and 30,000 in April. Manufacturing gained just 4,000 jobs in June. But health care added 53,000 positions and retailers 33,000.
Still, over the past three months, hiring has averaged 221,000, a step up from 195,000 in the first three months of the year. That suggests that many employers are confident that consumer demand for their goods and services will remain strong enough in coming months to justify more staffers.
Thursday's report may heighten expectations that the Fed will boost the key short-term rate it controls in September or, if not, in December. The Fed has kept that rate at a record low near zero for 6½ years to support the economy. A Fed rate hike would lead to higher rates for mortgages, auto loans and other borrowing.
"The mixed signals make the Fed's data-driven interest rate hike difficult to predict, though certainly the lower unemployment figures would indicate they hike sooner rather than later," said Tara Sinclair, a professor at George Washington University and chief economist at the jobs site Indeed.
Strong hiring has endured this year despite a miserable winter, which helped cause the economy to contract 0.2 percent at an annual rate in the January-March quarter.
The job gains show that employers are increasingly confident that their customer demand will keep growing. Their willingness to hire in anticipation of greater demand marks a shift from earlier in the economic recovery, when many businesses tended to hire only when essential.
A survey of purchasing executives at manufacturing firms released this week found that factories reported a scant rise in orders in June but ramped up hiring anyway.
Americans are finally spending more after boosting their savings earlier this year, in part because they're growing more confident about the economy. The Conference Board said Tuesday that its consumer confidence index reached 101.4, matching March's figure for the second-highest level since the recession.
That's good news for auto dealers and real estate agents. Auto sales jumped to nearly a 10-year high in May. The National Automobile Dealers Association forecasts that sales will top 17 million this year for the first time since 2001.
And home sales are running at an eight-year high and boosting construction. Permits to build homes jumped 11.8 percent in May to the highest level since 2007.
Most economists now expect economic growth to reach an annual rate of 2.5 percent in the April-June quarter and 3 percent in the second half of the year.