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.
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%.