Here’s Why June Was a ‘Welcome Boost’ for the Labor Market
In June, private sector employment experienced its best growth since November 2012, according to the monthly report compiled by payroll processor ADP and Moody’s Analytics. Private employers expanded payrolls by 281,000 jobs last month. For Moody’s Analytics chief economist Mark Zandi, the numbers were proof that “the job market is steadily improving” and that demand for labor is growing. And demand for labor is increasing across all industries and company sizes. “Judging from the job market, the economic recovery remains fully intact and is gaining momentum,” said Zandi.
Last week, when the U.S. Department of Commerce released its final calculation of first-quarter gross domestic product, the revision showed that the U.S. economy performed worse than previously thought; economic output contracted at a 2.9 percent annual rate during the first three months of the year. While that significant decline is believed to be largely the result of the exceedingly cold winter and the GDP contraction is not seen as the beginning of a new trend, it did serve as a reminder of the country’s deep and lingering economic scars.
The 2.9 percent contraction is weak even for an economy in which normal growth is below 3 percent. But the temporary downturn fits within a pattern seen throughout the economic recovery. Since the recession ended nearly five years ago, GDP has very rarely achieved what economists call ideal growth. It is true, however, that the U.S. economy has come a long way since 2009, when GDP decreased 6.4 percent.