Jobs Data Hints at Strengthening Recovery
Posted at 8:39 a.m. on July 5
The Bureau of Labor Statistics reported that payroll employment grew by 195,000 jobs in June, beating consensus forecasts. The unemployment rate remained steady at 7.6% after the labor force participation rate ticked up slightly from 63.4% to 63.5%.
Felix Salmon: “Today’s headline figure is certainly impressive: 195,000 new jobs were created in June, in the wake of a super-strong 207,000 new jobs in May. But the headline unemployment rate went nowhere, stuck at 7.6%, while the broadest measure of underemployment, the U6 unemployment rate, saw a worrying and substantial rise, to 14.3% from 13.8%.”
“This report is going to have no visible effect on Fed policy. The Fed has no employment-growth target: the thing it cares about, on the jobs front, is unemployment. So when it comes to measures like tapering and rate hikes, the survey which matters most is the household survey — the employment status of American households.”
Tim Duy: “A solid but not spectacular employment report. But the Fed is only looking for solid at this point to justify winding down quantitative easing. And time is running short to delay tapering. I suspect that incoming data has more to do with future reductions in the pace of asset purchases rather than the date that those reductions will begin. I suspect there will be little data between now and September of sufficient negative magnitude to dramatically alter the near-term path of policy.”