US Recovery Gains Strength as Jobless Rate Falls to 6.1 Percent

The US economy added 288,000 jobs in June and employment gains for previous two months were revised higher by 29,000 than previously reported, the US Department of Labor said on 3 July.

The April job report was revised upwards to 304,000 from 282,000 – the first time since January 2012 that the number broke the 300,000-mark.  

“Job growth looks to have kicked into a higher gear in the last few months,” said the Royal Bank of Scotland in a report. “The unemployment rate fell from 6.3% to 6.1% because employment surged by 407,000, so that is a ‘good’ decline in the unemployment rate.” Employment had increased by only 145,000 in May.

In a Bloomberg commentary, Mohamed El-Erian, chief economic adviser at Allianz SE, agreed that "these important employment gains are unambiguously good news for Main Street.” He added: “The 0.2 percentage point drop in the unemployment rate was genuine (in the sense that it was not the results of a lower labor participation rate).” 

The June figure is the fifth straight month that the US added more than 200,000 new jobs, the level required for employment to keep pace with population growth.

Higher employment has a direct effect on domestic consumption, which has an impact on imports from Asia and elsewhere. The improving US jobs picture is therefore expected to be positive for the economy and business activity in China, Southeast Asia and other export-focused markets. 

The Dow Jones index broke through 17,000 points, a historic high, in the wake of the jobs number. Most Asian stock markets also surged, including Hong Kong, Shanghai and Tokyo. 

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