The U.S. economy has seen tough times over the past few years, and speculation as to its health and recovery is in the news every day because Americans want to know how secure their jobs are, what they will be able to afford for themselves and their families, and what to expect for the future of their dollars. In recent weeks and months, optimism for the health of our economy has seemed to wane.
For the past two years, our economic growth rate has remained at a measly 2 percent. Economists were confident at the beginning of this year that we would finally boost that growth to 3 percent, but in mid-June, the International Monetary Fund (IMF) reduced its estimate of 2.7 percent growth for 2014 to 2 percent (Bloomberg.com, 6/16/14). Although employers have added many jobs over the past few months, the long winter placed a strain on several industries, and experts are worried that climate change could present even more challenges to economic projections in the coming years.
Some experts say that the economy is doomed to never fully recover from the Great Recession in 2008. While it would seem as though the economy has rebounded greatly, the truth is that salaries and household incomes have not risen in years and many are still unemployed despite growing numbers of jobs added each month. Other economists maintain that full recovery is on its way, but will take more time than originally estimated due to the slow rate of growth (The New York Times, 6/11/14).
While this speculation, estimation, and evaluation continues among experts and politicians, the Economic Employment Situation for June 2014 had some unexpected positive news – with the economy creating a higher-than-expected 288,000 jobs and the unemployment rate falling to 6.1%, a six-year low. In addition, the May payroll number was revised upward.
Other news from the June Jobs Report included:
- The number of long-term unemployed persons declined by nearly 300,000 and nearly 2% of the total unemployed.
- Major industries with gains included professional and business services (+67,000), retail trade (+40,000), food services and drinking places (+33,000), health care (+21,000), financial activities (+17,000), transportation and warehousing (+17,000), and manufacturing (+16,000).
- Temporary help services continued its upswing by gaining 10,000 jobs in June, which makes for a total gain of 216,000 over the past year.
Upon the news, the Dow Jones Industrial Average broke the 17,000-point barrier for the first time. Similarly, the S&P 500 and Nasdaq Composite were in the green. Some news outlets, like CNNMoney, claimed that this report was an indication "the American jobs recovery seems to have finally hit its stride" and also noted that rising pay rates, partially spurred on by some minimum wage increases in several states, have encouraged consumer and economic optimism (CNNMoney, 7/3/14).
Traditionally, the run-up to elections causes some economic uncertainty in the nation. We'll have to see if the optimism stemming from today's Jobs Report will stay high in the coming weeks and months.
Readers: Do you think the economy has recovered as much as it can already?