Steady as she goes

US jobs volatility obscures still steady gains

The month-to-month volatility in US job creation is obscuring the reality. A whopping 287,000 new positions were added in June, according to Friday's report. But May was revised down to just 11,000. Beneath the choppy numbers, there's still steady growth in employment. And that's after replacing all 8.7 million jobs lost after the crisis and adding 5.7 million more.

The June figure far exceeded expectations, especially after May's weak one. It's easily the strongest report this year. And even though the unemployment rate, at 4.9 per cent last month, is approaching territory usually associated with full employment, the longer-term trends present a more comforting picture. Over the last year, the United States added an average of more than 200,000 jobs a month. Over the past quarter, gains have slowed, but only to around 150,000 monthly. Steady, if modest, increases in wages also seem to have set in.

And while it's easily lost in a politically frenetic season, Uncle Sam has left the 2008 financial crisis well and truly behind when it comes to jobs. Unemployment peaked at 10 per cent in late 2009, and the rate has since halved. Over 14 million more people are working now than at the post-crisis low point. And looking ahead, smaller monthly increases would still be positive: The economy needs to add just under 100,000 jobs a month to absorb new entrants to the workforce, according to Federal Reserve Chair Janet Yellen.

The June report captures data that largely came in before the UK's referendum to leave the European Union, so it remains to be seen whether that has made US employers less confident. More broadly, though, as Yellen recently warned, too much focus shouldn't be placed on a single report, whether good or bad. Longer-term trends show the United States on a more satisfying course than recent volatility suggests.