Sparked by robust national jobs data from the U.S. Department of Labor, the Dow Jones Industrial Average pierced the 17,000 threshold for the first time this month.
The U.S. economy added 288,000 jobs in June, according to the latest data, prompting the nation’s unemployment rate to dip to 6.1 percent, its lowest rate since September of 2008.
The economy added more than 200,000 jobs for the fifth month in a row. That streak is the longest since the late 1990s and provides convincing evidence that the recovery has rebounded after an unusually harsh winter.
Jim Russell, senior equity strategist for Cincinnati-based U.S. Bank Wealth Management, told BizTimes, “The jobs report confirms that the U.S. economy ended the second quarter at a more rapid pace than it began the second quarter. The 288,000 payroll number for June and the fall in the unemployment rate to 6.1 percent are very welcome news. The details behind the numbers are also impressive.”
Wisconsin’s seasonally adjusted unemployment rate for May was 5.7 percent, down from 5.8 percent in April.
June was the 52nd consecutive month in which the U.S. economy has added private-sector jobs – the longest streak on record.
The U.S. economy is not just adding jobs at the fastest pace since the end of the Great Recession. Hiring also is spread out across multiple industries, and the new jobs pay better than in years past.
More than half (58 percent) of the jobs the economy has added so far this year are in positions that pay higher than the average hourly wage of $24.45, according to the Department of Labor. Those jobs are in sectors such as business, construction, health care, wholesale, manufacturing, government, finance, private-sector education and mining.
By contrast, about 48 percent of the new jobs created in 2013 paid above the national average, according the department.
Businesses in 2014 are hiring more white-collar employees, construction is on the rise and automobile sales are soaring. Auto sales are at the highest levels since 2006 with no letup in sight.
About 42 percent of the new jobs this year, meanwhile, fall into categories that pay less than the average wage, but even that overstates the case. Retailers have generated nearly 100,000 jobs in the first six months of the year, but almost one-third of those are at auto dealerships. While the average retail job pays just $17 an hour, employees at stores that sell autos and auto parts make about $22 to $25 an hour.
“With so many people sounding a dreary note this spring, it’s a good time to make the case for optimism. Looking at the data, it’s clear that the economy has recovered and is moving into a growth phase,” said Thomas Toerpe, senior vice president of capital markets for Associated Bank, in an investment note.
Toerpe cited national growth in private employment, real retail sales, real Gross Domestic Product, the S&P 500 and corporate profits.
“Over the next year, a firming labor market should support continued growth in the consumer sector. By mid-2015 this will prompt the Fed to cautiously end its low-rate policy. And with continued access to capital by businesses large and small, look for more businesses to join the ‘optimists club’ to help fuel a more robust expansion,” Toerpe said.
