The United States picked up 117,000 jobs in July and revised reports show an additional 56,000 jobs were added in May and June -- two bright spots after an awful week of economic news. Dow futures jumped about 100 points. The unemployment rate fell slightly to 9.1 percent.
The Labor Department report provided a slight boost to a stumbling economy.
The median estimate for Friday’s number had been 85,000. About 125,000 jobs per month are needed to keep the unemployment rate steady, while about 200,000 a month would bring it down a percentage point over a year, according to several economists.
The administration was clearly pleased with the report, which was better economic news than they were expecting in the wake of a stream of bad data in recent weeks. “As I say every month, you never want to make too much of any one month report because they are quite variable,” Council of Economic Advisors Chair Austan Goolsbee said on MSNBC after the news came out. But, he added, “it was certainly an encouraging development that we were way above expectations...now we've taken heavy blows the first half of this year but we got to grow our way -- we have a long way to go.
It was certainly a pleasant surprise for Goolsbee, who ends his stint at the White House today and plans to return to the University of Chicago this fall to teach. But with an eye to the future, he took his last opportunity for public comment as an administration official to echo President Obama’s calls for Congress to pass a set of free trade agreements, extend the payroll tax cut, create an infrastructure bank and send through a patent reform bill to spur job growth.
The better-than-expected jobs numbers cap a tumultuous week for the economy. The Dow Jones industrial average fell 512 points during Thursday trading -- the biggest tumble since October 2008 -- and the S&P 500 stock index and Nasdaq each fell by more than 3 percent. Asian markets tanked overnight, fueling a global sell-off that has wiped some $4.4 trillion from equity markets since July 26 and erased all the gains of the year in just two weeks.
The rally that followed Monday’s news that President Obama and congressional leaders had finally reached an agreement on a deal to raise the debt ceiling and mildly cut the deficit was short-lived, quickly giving way to a weeklong slide as markets focused on the underlying weakness of the economy. Safe-haven assets such as Treasury bonds and gold climbed to record levels.
Recent economic data give little reason for markets to be optimistic about growth this week. The most recent gross domestic product numbers, released last Friday, estimate second-quarter growth at a meager 1.3 percent, and revised first-quarter growth downward to just 0.4 percent.
White House press secretary Jay Carney assured reporters at a Wednesday briefing that the United States isn’t facing a double-dip recession and that Tuesday’s debt-ceiling agreement would send a “reassuring message” to global markets.
Joseph LaVorgna, chief U.S. economist at Deutsche Bank, told National Journal on Thursday that he expected a “modestly positive” number in Friday’s Labor Department report. But, he said, that may not be enough to turn the markets around.
“To say the market is psychologically fragile is an understatement,” LaVorgna said. “We really need a much-better-than-expected number.”
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