US economy adds 288,000 jobs, pushes Dow Jones above 17,000

 

The economy added 288,000 jobs in June, a better-than-expected number that helped push the unemployment rate down to 6.1 percent.

It's the lowest the unemployment rate had been since September 2008, the month Lehman Brothers went bankrupt, and the financial crisis that set off the recession began.

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Stocks rose on the robust report, with the Dow Jones average topping 17,000 for the first time just after the markets opened.

The figures will have politicians wondering how the expanding economy might affect this year's midterm elections, where Republicans are now favored to take back the Senate, in part, due to dissatisfaction with President Obama, whose approval ratings are hovering just above 40 percent.

The strong number marks the fifth straight month of jobs growth above 200,000, bolstering hopes the economy has turned a corner.

The June report from the Bureau of Labor Statistics includes good news beyond its topline numbers as well.

It showed that the economy added 304,000 jobs in April, more than the 282,000 previously projected. The jobs count for May was also revised up, to 224,000 from 217,000.
 
In its initial statement on the report, the White House highlighted the fact that the economy added 1.4 million jobs in the first half of this year, the most in any first half since 1999. On top of that, the economy has added nearly 2.5 million jobs in the past 12 months, the fastest yearly pace since May 2006. 
 
“There’s no doubt that the economy is strengthening, and this is good news,” Jason Furman, the chairman of Obama's Council of Economic Advisers, said on MSNBC. 
 
The figures could also raise pressure on the Federal Reserve to speed up the pace at which it backs away from its stimulus measures, and increase the chances of interest rate hikes. The Fed has cut its monthly bond purchases by $10 billion for the last five months, reducing it to $35 billion in June.
 
There are typically a number of statements from Republican lawmakers reacting to the job figures in the hours after their release, but they were in shorter supply on Thursday. The Bureau of Labor Statistics released its report on a Thursday to avoid the July 4 federal holiday, and many lawmakers and staff are not in Washington. 
 
Speaker John Boehner (R-Ohio) released a statement that didn't take note of the job gains but criticized Obama for not getting Senate Democrats to take up House GOP bills.
 
“The House has passed dozens of jobs bills that would mean more paychecks and more opportunities for middle-class families," Boehner said. "But in order for us to make real progress, the president must do more than criticize.
 
“Until he provides that leadership, he is simply part of the problem,” Boehner said.  
 
Republican National Committee Chairman Reince Priebus in a statement said his party was glad to see people found work last month but also blamed Obama and Democrats for slowing job gains. He noted that estimates of GDP growth were down in the first quarter of the year.
 
Priebus also noted that many people are not looking for jobs. The labor participation rate was unchanged in June. 
 
“Once again, the monthly jobs report reminds us that there are far too many of our friends and neighbors out of work,” he said. “And the unemployment rate doesn’t even reflect the millions of Americans who have given up on finding a job.”
 
Democratic leaders in Congress were quicker to put out statements. 
 
They called for action on immigration and transportation bills that they said would boost job growth. 
 
Senate Majority Leader Harry Reid (D-Nev.) said House Republicans, “under the influence of the Tea Party” are refusing to take up immigration.  
 
“Their refusal is costing our economy added growth that we need,” he said. 
 
House Minority Leader Nancy Pelosi (D-Calif.) also took a swipe at House Republicans saying their “relentless obstruction and dysfunction are holding back our growth and threatening hundreds of thousands of American jobs.”
 
She suggested raising the minimum wage, renewing emergency unemployment benefits and reauthorizing the Export-Import Bank.

Furman also called on Congress to pass a transportation bill. He said a failure to do so would jeopardize hundreds of thousands of jobs later this year.

June is the fifth straight month job growth as exceeded 200,000, the first time that has happened since September 1999 to January 2000.
 
The number of long-term unemployed, those out of work for at least six month, fell by 293,000 in June to 3.1 million.
 
Growth was seen across different sectors of the economy.
 
Manufacturers added 16,000 new jobs, while construction added 6,000. Retailers added 40,200, and financial firms tacked on 17,000. Restaurants and bars hired 32,800 more people last month. 
 
Jared Bernstein, a former economic adviser to Vice President Biden, said the only negative he saw in the report was the 275,000 increase in the number of involuntary part-time workers.
 
Still, he noted, the figure is volatile and has dropped 650,000 over the past year. 
 
With jobs growth accelerating at a faster pace, “this suggests an underlying improvement in the pace of employment growth that may be more durable than some of the ‘head fakes’ we’ve seen earlier in the recovery,” he said in his blog. 
 
While there is still too much slack, “if this pace of job growth persists, it will help close those gaps a lot quicker than the pace we were seeing a year ago.”
 
— This story was first posted at 8:34 a.m. and was updated at 10:56 a.m.