The June jobs report showed stronger-than-expected employment, not only for last month, but also the previous two months. That's a bit of good news not only for the unemployed, but also those who are working but would like a better job.
The Labor Department says that, while the June unemployment rate was unchanged at 7.6 percent, payrolls expanded by 195,000. Additionally, upward revisions were announced for the number of jobs added for both April and May. Both were put at nearly 200,000 jobs.
Over the past several weeks, the markets have had some occasionally volatile reactions to Federal Reserve Chairman Ben Bernanke's prediction that the central bank will begin scaling back on monthly asset purchases, if the job market continues to heal. The mood of the markets shifted as a variety of Fed officials subsequently indicated that they'll be careful not to end so-called quantitative easing too quickly. Market-based interest rates have risen while stocks have more recently been rallying.
Where are the jobs?
During the recovery from the 2007-2008 financial crisis, the quality of jobs has been a big proverbial question mark. That's an issue in the June report, with leisure and hospital and retail accounting for more than half of the jobs added. The government says there were 5,000 jobs lost in the federal government, which has lost a total of 65,000 jobs over the previous year.
In a written report, Mesirow Financial economist Diane Swonk said, "Everyone would rather see an economy that can generate jobs without as much support from monetary policy. That said, the quality of jobs matters as well as the quantity of jobs we are creating; on that front, we are still falling short."
Average hourly earnings have risen by 2.2 percent over the previous 12 months. That is compared to the 1.4 percent increase in consumer prices over the past year.
White House reaction
The White House embraced the report. Alan B. Krueger, Chairman of the Council of Economic Advisers, issued a statement saying "today's employment report provides further confirmation that the U.S. economy is continuing to recover from the worst downturn since the Great Depression." He also cautioned that "the monthly employment and unemployment figures can be volatile, and payroll employment estimates can be subject to substantial revision."
Economist Scott Anderson, with San Francisco's Bank of the West, issued a report that was largely positive. Anderson said the report "reveals a stronger, more resilient U.S. economy with a labor market recovery that is starting to keep pace with the economic expansion." Anderson said, "As the drag from sequestration and the global economy fades, the U.S. economy appears to be on the starting block for a self-sustaining, more-balanced, economic expansion in the year ahead."
The Taper Caper
Many experts agree that the Federal Reserve remains on track to continue to consider cutting its $85 billion in monthly asset purchases later this year. Says economist Anderson, "A September taper announcement now appears almost guaranteed." That will require continued improvement on the jobs front and an absence of any significant new financial crisis or other market-rattling blow-up.
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