US non-farm payrolls rise by 222,000 in June

The US jobs market continued creating jobs at a rapid clip but wage growth continued to fall short of expectations.

US non-farm payrolls rose by 222,000 in June, according to the Bureau of Labor Statistics.

Economists had forecast an increase of 177,000.

The private sector accounted for the lion's share of the rise, with hiring up by 187,000 overall and by 162,000 in services.

Motor vehicle and parts and information were the only subsectors that saw declines in employment, with falls of 1,300 and 4,000, respectively.

Average hourly earnings meanwhile rose by 0.2% versus May, as expected, but in year-on-year terms were only 2.5% (consensus: 2.6%) ahead after growth of 2.4% in May.

But contrary to expectations the unemployment rate ticked higher by a tenth of a percentage point to 4.4% (consensus: 4.3%), as the labour force participation rate increased from 62.7% in May to 62.8% for June.

In a positive sign, the index of aggregate weekly hours, which some analysts consider to be the closest thing to a monthly GDP reading, jumped by 0.5% on the month.

Commenting on the data, Paul Ashworth, chief US economist at Capital Economics, pointed out how the annual rate of growth in average hourly earnings "only" edged back from 2.5%.

"We will find out what Fed Chair Janet Yellen thinks of this next week, during her semi-annual congressional testimony. Our view is that, despite the lack of a pick-up in wage growth and core inflation, the Fed will nevertheless push ahead with hiking interest rates. The unemployment rate is already unusually low and is likely to fall further over the coming months."

As of 1405 BST, the yield on the benchmark 10-year US Treasury note was up by two basis points at 2.39%, while that on the two-year note was flat at 1.40%.