— Joseph Weisenthal (@TheStalwart) July 3, 2014
And it’s also lower than it was when Ronald Reagan won re-election on a “Morning In America” theme. But it’s a recovery from a far deeper recession, and one clearly inherited by Obama and not created by him. Vinik evaluates the new report:
For the past few years, it was like clockwork: A disappointing summer of job growth would give way to a much stronger winter. Economists would hesitantly forecast that the economy was about to kick into second gear. Then the summer would come and the disappointing data would return.
But finally, it looks like we are ready to break that trend: The economy added 288,000 jobs in June, soundly beating economists’ expectations of 211,000, and the unemployment rate fell to 6.1 percent. You can see this pattern of strong winter and weak summer—and the possible breaking of it—in the three-month moving average of job numbers:
That five-month streak “is the longest since the late 1990s and provides convincing evidence that the recovery has rebounded after unexpectedly shrinking during this year’s harsh winter.” Ylan Mui continues:
Perhaps most important, Gallup found that 45 percent of Americans were working full-time in June, one of the highest rates since the polling company began tracking the figure in four years ago. The government data released Thursday showed the size of the country’s workforce holding steady, albeit at a low level. Still, there is hope that the surprising slide in the size of the labor force may be ebbing, if not starting to turn around. “While few might agree that the economy has fully recovered from the Great Recession, there is no doubt that the job market is much stronger now than in prior years,” Gallup said in its report.
And never forget this chart:
Not bad for the worst president since World War II.
Meanwhile, Danielle Kurtzleben declares that today “is the total solar eclipse of jobs days”:
— a rare day when both initial jobless claims and the monthly unemployment report come out simultaneously.
At the same time the government reported the economy added a strong 288,000 jobs in June, it also reported that the number of Americans who filed initial claims for unemployment insurance was at 315,000 for the week ending June 28.
That figure held relatively steady from the week before, when initial claims totaled 313,000. And though weekly initial claims data can be volatile, the smoother 4-week moving average also only shifted up by 500, to 315,000. That smoother moving average makes it easier to see trends than the raw numbers, and it shows improvement even in the first half of 2014. Since then, it has declined from nearly 350,000.
This level of claims is right around where claims were before the financial crisis hit. It is also a vast improvement over the middle of the recession, when claims were more than double where they are now.
Yglesias’ two cents:
One important data point from today’s release — “wages rose 2 percent over the past year.”
This is a bit of an ambiguous indicator. The number is high enough that people who’ve been itching for interest rate hikes can certainly point to it as a sign that economic slack is gone and it’s time to shift to tighter money. On the other hand, 2 percent year-on-year growth is hardly mind-blowing prosperity. It’s not even a hint of catchup from the years-long span of massive slack and no wage growth. Giving workers a chance at seeing some real gains requires the Fed to not have an itchy trigger finger on those rate hikes.
He also points to this encouraging tweet:
Labor force up by 81K. Unemployed down by 325K. –> That’s how you want the unemployment rate to drop.
— Michael R. Strain (@MichaelRStrain) July 3, 2014
But this, from economist Justin Wolfers, could be the tweet of the day:
There is simply no bad news in this jobs report. Go on, dig into the detail, and see if you can find it. I dare you.
— Justin Wolfers (@JustinWolfers) July 3, 2014
Jordan Weissman tries his best:
I think there’s some reason for optimism, especially given the fact that employers kept hiring while the economy retracted during the winter. Companies may finally feel good enough about the future to keep adding to their payrolls. On the other hand, as Neil Irwin points out at the Times, we’ve been here before. Below, I’ve graphed out a three-month rolling average of U.S. job creation. The labor market is almost back to the pace it hit in January 2012, after which employment growth took a nosedive.
It’s also possible, Irwin points out, that schools juiced this month’s numbers a bit by staying open later into the summer to make up for days lost because of the miserable winter weather. And as Wolfers notes, there’s always a margin of error of +/- 90,000 jobs on each of these reports. For now, we have some good news—but it’s too early to tell if we’re reaching a new new normal.
And Casselman notes that “as always, there are caveats” to any good report:
June’s employment gains were mostly in part-time jobs, and the number of people working part time because they couldn’t find full-time work rose by 275,000. Much of the job growth was concentrated in low-paying sectors, such as restaurants and retail, while hiring in the better-paying construction sector continued to lag. The number of people out of work six months or more fell to a five-year low, but, at least as of May, not because the long-term unemployed were actually finding jobs.
Patrick Brennan anticipates some grousing from the right:
Skeptics — see that incorrigible pessimist Arthur Brooks — will always question why exactly we’re celebrating the labor-force-participation rate merely staying steady, at the lowest rate since the 1970s, and jobs growth at a rate at which it will take years to return to employment levels, as a share of the population, that we saw before the recession.
Two points: It’s all relative, and it is notable that we are seeing stronger growth now than we have seen in years. Second, the labor-force-participation rate isn’t just being pushed down by a bad economy — it’s in a secular demographic decline. I’d like it to rise, and to be higher than it is, but in a certain sense, it’s not ridiculous to celebrate its holding steady as a victory.