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Unemployment rate drops in June, but questions remain

The U.S. economy added 223,000 jobs in June and the unemployment rate fell 0.2 percent to 5.3 percent.

The U.S. economy added 223,000 jobs in June and the unemployment rate fell 0.2 percent to 5.3 percent, its lowest level since April 2008, according to the Department of Labor.

Job gains occurred in professional and business services, health care, retail trade, financial activities, and transportation and warehousing, according to the Bureau of Labor statistics.

However, some economists see continued cause for concern.

Dan North, chief economist at trade credit insurance provider Euler Hermes North America, told Forbes the report indicates, a “step backwards.” He points to data that indicates the labor force participation rate hit its lowest level since 1977 after declining a “fairly dramatic” 0.3 percent to 62.6 percent in Thursday’s labor report.

“The labor force shrunk,” said North, with reductions in both the number of employed and the number of unemployed.

Currently 8.6 million Americans are unemployed.

In June there were 653,000 discouraged workers, defined as people not looking for work because they don’t believe they can find adequate jobs.

In another sign of employment softness, average hourly wages came in flat, which, coupled with the dip in labor participation, could provide the Federal Reserve with more time before pulling the trigger on its first rate hike in almost a decade, according to a report by USA Today.

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