U.S. Jobs Up and Down; The Real Story’s in the Averages

We just saw a big ‘wow’ number: 287,000 U.S. jobs added in June, after a dismal report of 38,000 jobs added in May.
What’s going on?

As usual, when it comes to jobs reports, a longer look back gives a more accurate picture.
Year to date, the United States has averaged 147,000 net new jobs per month.
During the same period, the labor force (which has been as volatile as monthly jobs numbers) grew an average of 181,000 new participants.
Meanwhile, since January, the U.S. unemployment rate (U-3) has fluctuated between 4.7% and 5%.
It’s currently at 4.9%.
All of this means we’re not seeing a boom or bust in jobs; we’re seeing moderate growth.
We’re seeing a moderate increase in the number of discouraged workers coming back into the labor force as they see more opportunity. This keeps the unemployment rate from plummeting.
Steady, moderate performance is a good thing.
It underscores the probability that we'll have no recession in 2016. It reinforces the fact that the U.S. remains one of the strongest world economies.
It's not spectacular performance, but it may stay positive longer because of that.

---

Pete Gioia is an economist with CBIA. Follow him on Twitter @CTEconomist.