The U.S. economy is showing its muscle with job growth much higher than anticipated in June and the unemployment dropping to a six-year low. Conway G. Gittens reports.
The American worker has much to celebrate: new jobs topped 200,000 for the fifth month in a row. That hasn't happened since the tech boom of the late 1990s. Total payrolls grew by a more-than-expected 288,000 in June and the Labor Department's revisions to April and May show a lot more job creation than first announced. Anthony Chan is the chief economist at Chase: SOUNDBITE: ANTHONY CHAN, CHIEF ECONOMIST, CHASE (ENGLISH) SAYING: "I have no doubt that relative to the first quarter the next three calendar quarters, including the second quarter, will be a lot stronger and this employment report is consistent with that view." So where were the gains? Services made up the lion's share, followed by traditionally higher-paying professional and business positions; retail - four times the growth seen the month before, and even the government added to the numbers, reversing zero gains the prior month. But many of the new hires last month were force to work part-time. And another concern: Americans are still not earning more money and that will eventually hamper the economy, says Decision Economics' Cary Leahey. SOUNDBITE: CARY LEAHEY, SENIOR ECONOMIST, DECISION ECONOMICS (ENGLISH) SAYING: "Because we know we are creating jobs. We could have a three to four percent growing economy with the job creation that we have currently, only if labor productivity would pick up and we would have a much stronger economy, much stronger consumer spending, housing and the like if we had more wage gains. So if we can get a pick-up in wages and that's consistent - that's really the big news in the report." But on the upside, the unemployment rate is at a six-year low of 6.1 percent, because the long-term and short-term unemployed are finding work and not dropping out of the workforce. Jonas Prising, CEO of staffing group ManPower sees a slow, yet steady jobs recovery for the rest of the year. SOUNDBITE: JONAS PRISING, CEO, MANPOWERGROUP (ENGLISH) SAYING: "It's taken a long time to gain those jobs back and I don't think there's any reason to believe that we will see a sudden acceleration in terms of jobs growth because the outlook is still of a good economic growth, but relatively moderately still." And a moderate economy means this jobs report won't force the Federal Reserve to start hiking rates faster than it's already indicated.