updated 7/6/2007 10:37:38 AM ET 2007-07-06T14:37:38

Employers boosted payrolls by a better-than-expected 132,000 jobs in June, enough to keep the unemployment rate at a relatively low 4.5 percent. It was another sign that the economy is snapping out of a nearly yearlong sluggish spell.

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The latest picture of the nation’s employment climate, released by the Labor Department on Friday, also showed that workers saw solid gains in their wages last month.

The tally of 132,000 new jobs was stronger than the 125,000 that economists were forecasting. They did, however, predict that job growth would be sufficient to hold the unemployment rate at 4.5 percent, where it has stood for three straight months.

“The economy seems poised to return to its full potential,” said Carl Tannenbaum, chief economist at LaSalle Bank. “Employers are seeking opportunities to add to their talent pools. The demand for labor is being driven by very solid demand for goods and services.”

New hiring in the areas of education, health services, leisure and hospitality and government drove overall job growth last month. Construction companies also expanded employment — even as they coped with fallout from the housing slump. Those employment gains swamped job cuts at factories, retailers and certain professional and business services.

Meanwhile, the economy added more jobs in April and May than the government previously thought. Revised figures released Friday showed that payrolls grew by a strong 190,000 in May, much stronger than the 157,000 reported last month. In April, 122,000 positions were added, which was better than the 80,000 previously reported, which had been the fewest in two and a half years.

Workers saw modest wage gains in June.

Average hourly earning rose to $17.38, a 0.3 percent increase from May. That matched the rise anticipated by economists. Over the last 12 months, wages grew by 3.9 percent.

Wage growth is important to workers and supports consumer spending, a major ingredient in healthy overall economic activity. The modest increase in wages should ease inflation fears.

Federal Reserve Chairman Ben Bernanke and his colleagues keep a close eye on wages for any signs that they might generate inflation.

Out of control inflation is bad for the economy and for the pocketbook. It shrinks paychecks, erodes purchasing power and eats into the value of investments.

The Federal Reserve last week noted that there have been some improvements on some inflation readings but made clear that it is not letting down its guard on this front. The biggest danger to the economy is if inflation doesn’t recede as the Fed anticipates, Fed policymakers said.

Still, Fed policymakers have enough faith in their inflation forecast that they left a key interest rate last week at 5.25 percent, where it has been for a year.

Companies have continued to hire at a decent pace even as the economy has endured a nearly period of sluggishness. But the strain of the ailing housing market and problems in the automotive industries have clearly been felt.

In the first half of this year, job growth averaged 145,000 a month. That was weaker than the average monthly gain of 189,000 for all of 2006.

Economic growth nearly stalled in the first three months of this year, with business expansion slumping to a pace of just 0.7 percent, the worst in more than four years. The ailing housing market was a main factor behind the weakness.

Analysts believe the economy rebounded in the April-to-June quarter, expanding at a pace anywhere from 2.3 percent — to more than 3 percent. The government’s estimate of second-quarter economic activity will be released later this month.

Despite the healthy jobs market and the budding rebound, the public is giving President Bush low marks for his economic stewardship.

Only 37 percent approve of his handling of the economy, tying a record-low set in November 2005, according to an AP-Ipsos poll.

Trying to capitalize on that, Democrats have been pushing policies they say are aimed at closing the gap between low-wage and high-wage workers. A new law will boost the federal minimum wage from $5.15 an hour to $7.25 an hour over two years. The first increase of 70 cents will go into effect later this month.

Across the country, the length of peoples’ job hunt was little changed.

The average time the 6.9 million unemployed people spent in their job searches was 16.8 weeks in June, up slightly from 16.7 weeks in May.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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