Robust US job creation in the second quarter confirms a bounce after a weak opening to 2014. But Thursday's report, showing 288,000 new nonfarm jobs in June, fuels a more promising outlook as well. With other data also positive, growth is finally building.
Hiring dipped in the bitter winter. The weather probably had a lot to do with America's GDP shrinking at a nearly three per cent annual rate in the first quarter. But employment has roared back from April to June, averaging 272,000 new jobs monthly - nearly double the pitiful average for December to February. Fittingly, perhaps, the cheerful news was released a day earlier than the usual "Jobs Friday" because of the Independence Day holiday on July 4.
In June specifically, the employment gains came across the board. Even government entities, often cutting jobs in recent years, hired in all the relevant segments. Even with a tiny uptick in workforce participation, the unemployment rate fell to 6.1 per cent, the lowest since September 2008.
Longer-term trends point beyond a second-quarter rebound toward stronger expansion overall. The six and 12-month averages for jobs created have both reached their highest levels since 2006. More broadly, US auto sales last month hit their highest annual rate in nearly eight years. Home building is picking up too, with May's 12-month average for new residential construction starts the highest since 2008. Consumer sentiment has been noisier, but the Reuters/University of Michigan survey's six-month average in June was at its highest point of the recovery.
Even after allowing for the expected rebound in the second quarter from the first, the US economy appears to be on a more solid track. An absence of big global shocks helps, and uncertainty may be dissipating, too. After all, the US Congress isn't expected to force another debt ceiling fight or shutdown any time soon. America's recovery is hardly strutting yet, but it looks as though it is speeding up from a crawl.
