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In June, the underemployment rate rose from 13.8 percent to 14.3 percent. That's still down from 14.8 percent a year ago. The rate peaked at 17.1 percent in April 2010.
Jobs have been added at a faster pace this year than the economy's sluggish growth would suggest. The economy expanded at only a 1.8 percent annual rate in the first three months of the year. Most analysts think it grew even more slowly in the April-June quarter.
But later this month, the government will revise its estimate of the economy's growth for the first quarter, and many analysts think it will be revised up. They also think the economy will accelerate in the second half of the year.
Last month's job growth came solely from the private sector, particularly services firms. Government jobs fell 7,000, mostly at the federal level. The federal government has shed 65,000 jobs in the past 12 months. Some of that decline is due to the spending cuts that kicked in March 1.
Declining government employment has been a drag on the job market since the recession officially ended in June 2009. In a typical recovery, governments add at least 20,000 jobs a month.
Solid hiring in the private sector is lifting wages, even in some lower-paying industries. Average hourly pay for retail employees, for example, rose 6 cents in June to $16.64, and is up nearly 2 percent in the past year.
The overall increase in pay is "the standout feature of this report," said Ryan Sweet, an economist at Moody's Analytics. Low inflation rate is also helping consumers, he noted.
"The tide is continuing to turn for the consumer," Sweet said. "The consumer is going to continue to be able to shoulder this recovery."
June's 7.6 percent unemployment rate is derived from a survey of households, which found that 177,000 more people started looking for jobs last month. Most found them. The rise in job seekers suggests that Americans think their prospects have brightened. Because some job seekers didn't find work right away, the number of unemployed was largely unchanged at 11.8 million.
The job gain for the month is calculated from a separate survey of employers.
The percentage of Americans either working or actively looking for work rose for a second straight month to 63.5 percent. This is called the "labor force participation rate." The participation rate has been generally declining since peaking at 67.3 percent in 2000. That's partly the result of baby boomers retiring and leaving the workforce.