Jobs Growth Contributes to Uncommonly Strong U.S. Economic Picture Employers add 209,000 jobs as jobless rate drops to 4.3%, a 16-year low By Eric Morath
https://www.wsj.com/articles/u-s-hiring-maintains-strong-pace-jobless-rate-falls-to-4-3-1501849959
The U.S. economy is hitting a sweet spot seldom seen in past expansions, posting in July a record 82nd straight month of job creation and an unemployment rate at a 16-year low, despite slow growth in output.
Economic growth has been stuck stubbornly near a 2% annual rate, the weakest expansion in output since World War II. But by a range of measures the economy is pushing into new territory, including record stock-price highs, improving consumer confidence and rising corporate profits. Even wages, though rising slowly, are advancing at a healthy pace when adjusted for exceptionally low inflation.
The latest evidence was a Labor Department report Friday that showed U.S. employers added 209,000 jobs to payrolls in July and the unemployment rate fell to 4.3%. With the July increase in hiring, the record stretch of monthly hiring is equivalent to six years and 10 months, almost three years longer than the second-best streak, from 1986 to 1990.
Expansions tend to get tripped up by boiling excesses, like a housing bubble in the 2000s, a tech bubble in the 1990s and inflation in the early 1980s. But this economy appears to have some more room to run as it enters its ninth year.
Other parts of the global economy, including Europe and China, are contributing after stumbles in recent years, adding to global growth that is spilling back to the U.S.
“Compared to six months ago, the global economic outlook has certainly shifted in a positive direction,” said John Silvia, chief economist at Wells Fargo. In the U.S., “there are more jobs, and better jobs, and that’s a confidence builder.”
Hiring accelerated this summer after a spring slowdown, keeping job growth in line with last year’s pace despite expectations among some economists that hiring would cool this year.
Other economic markers are flashing green. The stock market is at records, with the Dow Jones Industrial Average topping 22000 this week. Low unemployment and modest inflation have stoked consumer confidence to the highest levels since 2000, and that could slowly be translating into more consumer spending, which accelerated in the second quarter.
That points to an economy set to outperform the long but sluggish expansion’s 2.1% average annual growth rate through June.
“This is not a 2% economy,” said Ellen Zentner, chief U.S. economist at Morgan Stanley. “If you look at the domestic economy, it’s much stronger.” CONTINUE AT SITE
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