The following is an excerpt from Patricia Cohen | July 8, 2016 | Nytimes.com |
Quashing worries that job growth is flagging, the government on Friday reported that employers increased payrolls by 287,000 in June, an arresting surge that could reframe the economic debate just weeks before Republicans and Democrats gather for their conventions.
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.
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 unanimously decided to postpone increasing the benchmark interest rate.
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 announcement, with the Standard & Poor’s 500-stock index gaining 1.5 percent to end the day just short of the record close it recorded last year.
But the political response was relatively muted, in deference to the shootings of police officers in Dallas. Both presidential candidates canceled campaign events, and the presumptive Republican nominee, Donald J. Trump, tweeted that he had postponed a scheduled speech on economic opportunity.
At the moment, though, the Democrats are best poised to take advantage of the positive employment news.
Lynn Vavreck, a professor of political science at University of California, Los Angeles, said that when it came to presidential elections, the economic trend was 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.”
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