By David Pendered
Georgia Tech Professor Thomas “Danny” Boston said the jobs report issued Thursday by the U.S. Labor Department contains several signs the economy continues to improve.
The jobs report indicates the nation’s unemployment rate should dip into the 5 percent range when the July report is released, Boston wrote in a column posted on Georgia Tech’s website. That report is to be released Aug. 1.
The unemployment rate among blacks continues to decline, which Boston wrote is a particularly positive indicator because unemployment among blacks is, “particularly intractable.”
The jobs report showed black unemployment was 10.7 percent in June and had declined from May. Unemployment among whites was 5.3 percent and little changed from May.
This is Boston’s entire published observation on black unemployment:
- “Virtually all segments of the economy experienced gains. Unemployment among blacks has been particularly intractable. Yet last month it declined by almost a full percentage point, from 11.5 percent to 10.7 percent. This decline is a bellwether. An unfortunate fact is that employment gains among blacks have always trailed gains of every other demographic group. So when their rate shows improvement, rates among other groups have already recovered. Black unemployment declined over the last year from 13.5 percent to its current level of 10.7 percent.”
Boston released his observations the same day the Labor Department reported a total of 288,000 new jobs were created in June. The private sector accounted for 262,000 of the new jobs. June’s job growth marked the fifth consecutive month with job growth of at least 200,000, bringing to 9.7 million new private sector jobs over the past 52 months, according to the Labor Department.
Boston analyzed the jobs report and reached several optimistic findings. Among them:
- “For three consecutive months, the economy produced an average of 272,000 jobs. This amount is more than adequate to absorb displaced workers who are re-entering the market and normal labor force growth. The expansion is now marching to a normal beat.
- “Since World War II, the average expansion has lasted five years. The current recovery began in June 2009, which means last month the economy crossed the five-year threshold, and it seems poised to continue to grow months if not years into the future.
- “A final important signal of a return to normality is the fact that the unemployment rate dropped even though 81,000 workers came back into the labor market. This means job growth was substantial enough to absorb the new influx as well as those who remained in the labor market searching for work. The numbers of unemployed persons declined by 325,000 in June, while the number of employed persons increased by 407,000. These are indeed signs of a very healthy recovery.”
Boston concluded with this outlook:
- “No longer do we have to look for the light at the end of the unemployment tunnel. We have finally exited the tunnel. The question remaining is how long will the Federal Reserve allow the recovery to continue before raising interest rates to combat inflation.”