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Slight Rise in the Participation Rate and Average Hourly Earnings

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Participation rate rose to 62.7%

The participation rate represents a more important analysis in terms of unemployment in the country. It negates people who aren’t actively looking for a job. The participation rate for June saw a rise of 0.1%—it rose to 62.7. The labor force rose by 414,000—compared to the previous month—the overall number came out at ~158 million. The employment-to-population ratio saw a slight fall of 0.1% in June—it came out at 59.6. The following graph shows the volatile movement of the participation rate even as average hourly earnings continue to rise.

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Average hourly earnings also rise

Average hourly earnings are another major indicator to be considered when looking at employment statistics. Average hourly earnings saw a decent rise of $0.02 to $25.61 in June. The average hourly earnings of private sector production and non-supervisory employees rose by $0.04 to $21.51. The average work week remained unchanged at 34.4 hours. This marked the fifth consecutive month of unchanged work hours. The average weekly earnings also posted a rise—they rose to $880.98.

Impact on the market

Strong jobs data had a positive impact on the market. It signals a stronger economy, but it can be a double-edged sword with a stronger economy giving more freedom for the Fed to move ahead with the rate hike plans. The initial positive trend was evident in markets. The S&P 500 (SPY) rose by 1.5% on July 8 with mid-cap stocks leading the rise. The SPDR S&P MidCap 400 (MDY) rose by 1.9%, while the Nasdaq (IXIC) and Dow 30 rose 1.6% and 1.4%, respectively.

Looking at the performance of other major ETFs, the PowerShares QQQ Trust Series 1 (QQQ) rose by 1.6%. The bond-related ETFs were also trading higher—the iShares 20+ Year Treasury Bond (TLT) rose by 0.74%.

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