The government released the employment report for June just a few minutes ago. For the first time in a long time it was basically all good news. There were over 280,000 jobs created during June and the unemployment rate is now 6.1%. It may be that much of the increase in jobs is due to the adjustments made by the government, but even so, it's great to have some good economic news.
The question now, of course, is whether or not the report is a one-time thing or if it portends a better economy moving forward. We know that for the last few years, job numbers that seemed to indicate better things ahead melted away by the summer as stagnation returned. This year, we have to possible roadblocks to a robust economy that could arise from higher oil prices due to the unrest in the Middle East, higher interest rates that could appear (although unlikely) or some other reason.
Then there is the issue of how the higher employment numbers mesh with the terrible GDP figures that we have for the first quarter where there was a 2.9% contraction in the economy. Certainly, the June employment figures together with those of the previous two months indicate that the contraction of GDP did not continue during the second quarter. There may be some robust growth numbers as economic activity that should have been in the first quarter got pushed into the second quarter. It is not going to make 2014 into a good economic year, but it could be enough to keep the year from being the start of a new recession.
The question now, of course, is whether or not the report is a one-time thing or if it portends a better economy moving forward. We know that for the last few years, job numbers that seemed to indicate better things ahead melted away by the summer as stagnation returned. This year, we have to possible roadblocks to a robust economy that could arise from higher oil prices due to the unrest in the Middle East, higher interest rates that could appear (although unlikely) or some other reason.
Then there is the issue of how the higher employment numbers mesh with the terrible GDP figures that we have for the first quarter where there was a 2.9% contraction in the economy. Certainly, the June employment figures together with those of the previous two months indicate that the contraction of GDP did not continue during the second quarter. There may be some robust growth numbers as economic activity that should have been in the first quarter got pushed into the second quarter. It is not going to make 2014 into a good economic year, but it could be enough to keep the year from being the start of a new recession.
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