Strong Job Creation

By Isaac Cohen*

The creation of 288,000 new jobs in June, announced by the Labor Department last week, was the best performance in the US labor market since 2008. The unemployment rate declined from 6.3 to 6.1 percent and the stock market for the first time broke the 17,000 point barrier. Such positive news followed the surprising fall of almost 3 percent in economic growth of this year’s first quarter

So far this year, average monthly job creation has reached 231,000 new jobs. As highlighted by the Chairman of the White House Council of Economic Advisers Jason Furman, in a Washington Post op-ed, this is “the largest first half-year for job growth since the late 1990s.”

All economic sectors created new jobs in June, with greater growth among those paying lower wages, such as retail with over 40,000 and hospitality 39,000. Even hiring by the government, local, state and federal, increased by 26,000 in June.

However, this positive rate of job creation is attained in a context of declining labor force participation, at 62.8 percent, the lowest level since 1978, down from 66 percent in 2008. At June’s pace of job creation, assuming the rate of participation in the labor force remains the same, the Wall Street Journal projects unemployment will be 5.7 percent by the end of the year and 5.1 percent by next June.

*International analyst and consultant. Commentator on economic and financial issues for CNN en Español TV and radio. Former Director, UNECLAC.

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