Payrolls Jumped as U.S. Jobless Rate Fell to 6.1 percent in June
Here is the opening for this informative report from Bloomberg:
Job creation surged beyond expectations in June and theunemployment rate fell to an almost six-year low of 6.1 percent, underscoring the strength of a U.S. labor market that will help spur a rebound in growth.
The addition of 288,000 jobs followed a 224,000 gain the prior month that was bigger than previously estimated, Labor Department figures showed today in Washington. The median forecast in a Bloomberg survey of economists called for a 215,000 advance. The number of long-term unemployed Americans fell to 3.1 million, showing they’re having greater success finding work.
A rebound in the economy after a first-quarter slump is encouraging companies such as Ford Motor Co. (F) to add to staffing levels, laying the groundwork for a pickup in wages needed to further propelconsumer spending. More employment opportunities will probably keep Federal Reserve policy makers on the path to reduce monetary stimulus.
“The improvement in the labor market is accelerating,” said Robert Stein, deputy chief economist at First Trust Portfolios LP in Wheaton, Illinois, and the top forecaster of payrolls the past two years, according to data compiled by Bloomberg. “We’re seeing a self-sustaining recovery where production growth leads to job growth, which leads to consumption growth.”
One can quibble about the quality of jobs but that is partly due to accelerated automation, and it would also miss the point. With the help of very accommodative monetary conditions, the US economy is just about where it should be five years following the bottom of a severe credit crisis recession.
GDP growth is gradually improving and it should continue on this trajectory, with the overall pace increasing somewhat, provided there is no significant spike in crude oil prices due to global tensions. Improving economic confidence will remain generally bullish for US equities and most other stock markets, until some time after rising long-dated government bond yields eventually persuade the Fed to tighten monetary policy. Yes, we are a little closer to the end of this bull run but it is still a ‘make hay while the sun shines’ environment.
(See also my opening comments on July 1st, if you have not already done so.)
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