June Jobs Report

The latest job report is good news. 288 thousand jobs were added, and the previous two months were revised up by a total of 29,000. The unemployment rate fell to 6.1%; and labor force participation remained steady, indicating that the fall was not due to workers leaving the labor market. 

This makes the past few months a strong showing job growth wise, despite a negative growth estimate for 1st quarter real GDP. But then employment figures are probably the better guide to current conditions. As Keynes said in the General Theory:

"In the case of an individual firm or industry producing a homogeneous product we can speak legitimately, if we wish, of increases or decreases of output. But when we are aggregating the activities of all firms, we cannot speak accurately except in terms of quantities of employment"

Oh, and the monetary value of output, or nominal GDP, but he gets to that as well.

Lest anyone take the above quote and throw it back at me for criticizing the Fed for steadily slowing its quantitative easing after negative real GDP growth estimates in the first quarter, I still think it's they're erring too much on the side of conservatism. The first sign of good news is not the time to stand back, as my previous post on employment shows, there is still a lot of slack in the labor market, a lot of long term unemployed, marginally attached, etc. Continued strong job growth will pull them back in and that will benefit all of us. The only risk of continuing QE to do so is slightly higher inflation and/or wage growth, which because we've had years of below average inflation and wage growth won't really hurt us, and it's incredibly easy to handle overheating with monetary policy.