WASHINGTON—The strong rebound in hiring last month, after almost zero new jobs were added in May, allayed worries that the long recovery in the labor market and the economy was coming to an abrupt end.
“We can all breathe a big sigh of relief,” said Harry Holzer, a Georgetown University professor and former chief economist at the Labor Department.
Friday’s government report showing growth of 287,000 jobs last month—following revised gains of just 11,000 in May and 144,000 in April—will bolster confidence among employers and policy-makers at the Federal Reserve (the Fed) that the expansion in the labor market and the broader economy remain on track.
The figures fueled a big rally on Wall Street on Friday, with the broad-market S&P 500 closing near a record high and other major stock indexes also surging.
But analysts said it would not be enough to push the Fed to raise interest rates later this month or possibly even in September, given the increased risks created by Britain’s surprising vote to leave the European Union. Analysts expect at most one rate hike this year.
The Fed will “still be watching and waiting with concerns about the Brexit vote,” said Alan Levenson, chief economist at Baltimore-based T. Rowe Price Group. “These data don’t show you anything about that,” he said, noting that the latest employment survey was taken before the June 23 referendum.
In short, the latest snapshot from the Bureau of Labor Statistics essentially sets things back to where they were before the lull in May. And that means the same slow and steady—some would say fragile—growth that has marked much of the recovery.
Economists don’t expect a repeat of June’s robust hiring anytime soon, but instead something closer to an average of 150,000 in coming months, which would still mark a slowdown from the monthly pace of nearly 200,000 in the first quarter and a 229,000 average last year.
Still, the latest jobs report was welcome news for Hillary Clinton, the presumptive Democratic presidential nominee. Another month of weak hiring would have dealt a blow to her political fortunes as they are inextricably linked to the performance of President Barack Obama and the economy.
Neither Clinton nor Donald Trump, her likely Republican opponent in November, immediately commented on the jobs report, as Trump did a month ago when he spotlighted the poor hiring. But Jason Furman, Obama’s chief economic advisor, hailed the bounce-back in hiring, saying it is “a clear indication that the economy continues to make solid progress.” The nation has added 14.8 million private-sector jobs since early 2010, he noted in a statement.
TNS
