08 July 2016

The American Economy Created More than 2 Million Jobs Last Month

Today's job report announced an additional 281,000 jobs (the last two months were revised down by 6,000 and the initial estimate for June was 287,000) and an uptick in the unemployment rate.

This marks 69 uninterrupted months of job gains. We are now just one quarter - three months - off from a 6 year streak of job creation. The old record - set in the 1980s - was 4 years. Half again as long is huge.  The difference between the 2nd and 3rd longest streaks is 2 months; the difference between this current streak and the 2nd longest streak is nearly 2 years.

During this streak the American economy has created 14 million jobs.

In just the last year - since June of 2015 - the labor force has grown by 1.9 million and the number employed has grown by 2.4 million.

Here's something rarely mentioned about those job numbers. The 287,000 jobs announced today are net. Jobs are continually created and destroyed and each month the Bureau of Labor Statistics announces their best estimate on the difference between those two numbers as "the monthly jobs number." The latest figures we have on the total jobs created and destroyed is from the 3rd Q of 2015 and in that quarter the economy created an average of 2,430,667 jobs (about 2.4 million) and destroyed 2,291,333 jobs each month for a net gain of 139,000. Think about how dynamic that is. Every month we create and destroy millions of jobs. (Of course it's not as absurd when you realize that 2+ million is only 1.5% of the labor force.)

There are at least two things to conclude from this dynamism. One, in an economy this dynamic it's really important to have a strong safety net in the form of unemployment benefits and welfare and extensive, on-going investments in job training, education, vocational and professional training for employees at every stage of their careers. Two, given how dynamic this economy is, it's just just another reason to feel optimistic: every month the American economy creates about 2 million new jobs.

P.S. The uninterrupted streak of job creation could still end at 67 months. Why? With this month's revision, May's numbers are only 11,000 and with next month's final revision for May that could easily become a negative number. It may take us 2 months to realize that this streak is over.

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