The economy had a better-than-expected net gain of 117,000 jobs in July and an unemployment rate dip to 9.1 percent, that came solely from private-sector hiring, as a revenue-starved public sector drags employment down.
July’s growth of 117,000 is a marked improvement over May’s 53,000 and June’s 46,000. The figures show continued growth in healthcare and social assistance, with 37,000 added jobs, and manufacturing, which added 24,000. Retail also posted encouraging growth, with a nearly 26,000-job gain, suggesting that consumers may be spending more.
Markets clearly read the numbers with some relief, with the Dow spiking by nearly 200 points at the open. But that optimism soon evaporated as traders focused back on the gloomy debt picture in Europe. On balance,however, the numbers show economic growth to be precarious, a fact that President Obama acknowledged in a speech at Washington, D.C.’s Navy Yard yesterday. “We need to create a self-sustaining cycle where people are spending, companies are hiring, and the economy is growing,” the president said.
While employment is not yet improving at a robust pace, U.S. companies are still setting themselves up for future, sustained growth and in the meantime are reporting solid earnings.