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Jobs Roar Back With Gain of 287,000 in June, Easing Worry Jobs Roar Back With Gain of 287,000 in June, Easing Worry
(about 3 hours later)
Quashing worries that job growth was flagging, the government on Friday reported that employers increased payrolls by 287,000 in June. It was an arresting surge in hiring just weeks before the Republican and Democratic conventions where the presidential nominees will present their competing economic visions. Quashing worries that job growth was flagging, the government on Friday reported that employers increased payrolls by 287,000 in June. The arresting surge comes as Republicans and Democrats fine-tune the economic messages they plan to deliver at their conventions later this month.
The official unemployment rate did rise to 4.9 percent, from 4.7 percent, but that was largely because more Americans re-entered the work force. And average hourly earnings ticked up again, continuing a pattern of rising wages that brought the yearly gain to 2.6 percent. The official unemployment rate did rise to 4.9 percent, from 4.7 percent, but that was largely because more Americans rejoined the work force. And average hourly earnings ticked up again, continuing a pattern of rising wages that brought the yearly gain to 2.6 percent.
“Wow, this one takes my breath away,” said Diane Swonk, an independent economist in Chicago.“Wow, this one takes my breath away,” said Diane Swonk, an independent economist in Chicago.
An unexpectedly grim employment report in May combined with Britain’s vote to leave the European Union had fanned wider worries that the American economy was in danger of stalling. And those fears persuaded the Federal Reserve last month to oppose any near-term increase in its benchmark interest rate. An unexpectedly grim employment report in May combined with Britain’s vote to leave the European Union had fanned wider concerns that the American economy was in danger of stalling. During its meeting last month, the Federal Reserve decided to postpone increasing its benchmark interest rate.
The latest report gives the Fed “a cushion,” Ms. Swonk said, to consider a bump in rates later this year. But the latest Labor Department report, Ms. Swonk said, gives the Fed “a cushion” to consider a bump in rates later this year.
Financial markets rallied on the news, with stocks up about 1 percent in early trading on Friday. Financial markets rallied on the announcement, with stocks up more than 1 percent at midday on Friday.
When it comes to presidential elections, the economic trend is more important than any particular number, said Lynn Vavreck, a professor of political science at University of California, Los Angeles. “As long as it’s going in the right direction, that’s a good sign for the incumbent party,” she said. The Democrats are best poised to take advantage of the positive news.
Lynn Vavreck, a professor of political science at University of California, Los Angeles, said that when it comes to presidential elections, the economic trend is more important than any particular number. “As long as it’s going in the right direction,’’ she said, “that’s a good sign for the incumbent party.”
Every monthly jobs report provides only a fleeting and incomplete picture, and a strike by more than 35,000 Verizon workers had artificially held down May’s totals. Concerns persist about the vitality of the economic recovery, which reached the seven-year point this month.Every monthly jobs report provides only a fleeting and incomplete picture, and a strike by more than 35,000 Verizon workers had artificially held down May’s totals. Concerns persist about the vitality of the economic recovery, which reached the seven-year point this month.
But Friday’s report, with the largest single monthly job gain since October 2015, helped blow away some of the cloudiest forecasts. The three-month average of monthly gains rose to 147,000, after taking into account the Labor Department’s slightly downward revision of the estimates for April and May. But Friday’s report, with the largest single monthly job expansion since October 2015, helped whisk away some of the cloudiest forecasts. The three-month average of monthly gains rose to 147,000, after taking into account the Labor Department’s revised estimates that showed 6,000 fewer jobs were created in April and May than previously reported. June’s figures will be subject to two more revisions.
“This report should ease any fears that a persistent slowdown or recession is coming soon in the U.S.,” said Dean Maki, chief economist at Point72 Asset Management. “The service sector is where the real strength is, with 256,000 hires, but the gains were widespread across sectors.” “This report should ease any fears that a persistent slowdown or recession is coming soon in the U.S.,” said Dean Maki, chief economist at Point72 Asset Management. “The service sector is where the real strength is, with 256,000 hires. But the gains were widespread across sectors.”
Mr. Maki pointed out that the vigorous report was in line with several other encouraging signs. New claims for unemployment benefits have stayed at rock-bottom levels, consumer spending is strong, the manufacturing and service industry indexes have jumped, and the number of unfilled jobs, 5.8 million in April, is at a record since the survey began. Mr. Maki pointed out that the vigorous report was in line with several other encouraging signs. New claims for unemployment benefits have stayed at rock-bottom levels. Consumer spending is strong. The manufacturing and service industry indexes have jumped. And the number of unfilled jobs, 5.8 million in April, is at a record since the survey began.
That could help Hillary Clinton, the Democratic standard-bearer, who has focused more than the Republicans on the steady economic improvements over President Obama’s two terms and the steep decline in the jobless rate from the recession’s peak of 10 percent. Hillary Clinton, the Democratic standard-bearer, has emphasized the steady economic improvements during President Obama’s two terms and the steep decline in the jobless rate from the recession’s peak of 10 percent.
While acknowledging the economy “isn’t yet where we want it to be,” Mrs. Clinton has argued that the United States is “stronger and better positioned than anyone in the world.” She has endorsed a higher minimum wage, expanded paid leave, more money for job training and a multibillion-dollar infrastructure plan.While acknowledging the economy “isn’t yet where we want it to be,” Mrs. Clinton has argued that the United States is “stronger and better positioned than anyone in the world.” She has endorsed a higher minimum wage, expanded paid leave, more money for job training and a multibillion-dollar infrastructure plan.
Many Americans, though, particularly those with fewer skills and less education, have yet to partake in the recovery’s rewards. Many Americans, though, particularly those with fewer skills and less education, have yet to enjoy the recovery’s rewards. Their deep-rooted discontent with the economy has been repeatedly voiced by the presumptive Republican presidential nominee, Donald J. Trump, who has opposed what he calls “job-killing” trade deals. He has promised to impose high tariffs as a way of reversing the decline in manufacturing jobs, and to deport immigrants.
Real median household income is lower than it was a decade ago. And a broader measure of unemployment that includes discouraged job seekers and those who would prefer to work full time instead of part time ticked down to 9.6 percent in June but is still nearly twice the official rate. There are other weak spots. Republicans can point out that real median household income is lower than it was a decade ago. And a broader measure of unemployment that includes discouraged job seekers, as well as those who would prefer to work full time instead of part time, is still nearly twice the official rate, despite ticking down to 9.6 percent in June.
The proportion of people employed or actively looking for work has also been dragging along at low levels, suggesting that more people would return to the work force if desirable jobs were available.The proportion of people employed or actively looking for work has also been dragging along at low levels, suggesting that more people would return to the work force if desirable jobs were available.
The deep-rooted discontent with the economy has been repeatedly voiced by the presumptive Republican presidential nominee, Donald J. Trump, who has opposed what he calls “job-killing” trade deals, promising to impose high tariffs as a way of reversing the decline in manufacturing jobs and to deport immigrants. Tom Perez, the labor secretary, conceded there was “still a lot of work to do.”
Tom Perez, the labor secretary, conceded there was “still a lot of work to do,” but scoffed at Republicans who have said the economy was at a standstill. “I think they were wrong,” he said. Unemployment for African-Americans, for example, whose jobless rate is typically about twice that for white Americans, rose last month to 8.6 percent from 8.2 percent.
Andrew Chamberlain, chief economist at Glassdoor Economic Research, said the rise in the jobless rate, which is based on a separate survey of households, “is probably for good reasons, because more people rejoined the labor force.” But Mr. Perez scoffed at Republican complaints that the economy was at a standstill. “I think they were wrong,” he said.
. Though the jobless rate, which is based on a separate survey of households, rose in June, it “went up for a good reason,’’ Mr. Perez said. ‘‘We’ve got more people looking for work and re-entering the work force.”
Given that the jobless rate has consistently been at 5 percent or lower since last fall, Mr. Chamberlain and other analysts argue it is time to lower the benchmarks for what is labeled a good or bad report. The tighter labor market is nudging up wages. David Lukes, chief executive of Equity One, a commercial real estate investment company, is one of several employers who said they have increased salaries and benefits to retain current staffers and attract new ones.
“There’s no question that job growth is significantly slower today than it was one or two years ago,” he said, when the average monthly number routinely topped 200,000. “But that is to be expected at this point in the economic cycle.” “I’ve had the troubling experience of losing good employees,” said Mr. Lukes, who has offered perks like flexible hours and stock incentives to keep the competition at bay. “Reward programs are much more important than they were three, four and five years ago.”
Taking account of the growing numbers of retiring baby boomers and the population growth, a monthly gain of 75,000 to 100,000 jobs is sufficient to keep the unemployment rate steady, while a 125,000 monthly gain is what is required to nudge it down further, Mr. Maki at Point72 Asset Management said. He said that for the kind of workers he was looking for — administrators, sales representatives, accountants, paralegals, construction managers — the labor pool is not that deep.
“I do think that whole framework will have to change over the next couple of years,” he added. Given that the jobless rate has consistently been at 5 percent or lower since last fall, several economists argue it is time to adjust the benchmarks for what is labeled a strong or weak report.
In the private sector, skilled workers are in demand and higher wages are dangled. “There’s no question that job growth is significantly slower today than it was one or two years ago,” when the average monthly gain routinely topped 200,000, Andrew Chamberlain, chief economist at Glassdoor Economic Research said. “But that is to be expected at this point in the economic cycle.”
David Lukes, chief executive of Equity One, a commercial real estate investment company, said that for the kind of workers he was looking for — administrators, salespeople, accountants, paralegals, construction managers — the labor pool is not that deep. Taking account of the growing numbers of retiring baby boomers and the population growth, a monthly gain of 75,000 to 100,000 jobs is sufficient to keep the unemployment rate steady, Mr. Maki at Point72 Asset Management said.
“I’ve had the troubling experience of losing good employees,” Mr. Lukes said, who has increased wages and perks like flexible hours and stock incentives to keep the competition at bay. “Reward programs are much more important than they were three, four and five years ago.”
Ian Siegel, co-founder and chief executive of ZipRecruiter, which aggregates job postings and distributes them to job seekers, said that demand was down from the peaks of 2015, but hiring was still strong in health care and warehousing.Ian Siegel, co-founder and chief executive of ZipRecruiter, which aggregates job postings and distributes them to job seekers, said that demand was down from the peaks of 2015, but hiring was still strong in health care and warehousing.
Construction workers are also keenly sought in some cities, he said, with postings that promise relocation packages, especially for managers.
Steve Rick, chief economist at CUNA Mutual Group, which provides insurance and financial services for credit unions nationwide, said: “I travel all over the country and everywhere I go, I sit down with C.E.O.s and ask them what their No. 1 problem is. They say, ‘Just finding qualified people, from a teller to a mortgage home officer.’”Steve Rick, chief economist at CUNA Mutual Group, which provides insurance and financial services for credit unions nationwide, said: “I travel all over the country and everywhere I go, I sit down with C.E.O.s and ask them what their No. 1 problem is. They say, ‘Just finding qualified people, from a teller to a mortgage home officer.’”
Turnover is also rising at these financial institutions, Mr. Rick said, as “people are getting better offers elsewhere.”
“There are a lot of positive and encouraging signals out there,” he said.
Matthew Ferguson, chief executive of the online job site CareerBuilder, which recently commissioned a survey of hiring managers and workers, said employers indicated they were being pressured to raise wages for skilled and semiskilled workers.