June Jobs Report Points to a Rapidly Growing Economy

The jobs report means that second-quarter GDP growth will likely exceed 8%.

The Bureau of Labor Statistics (BLS) recently announced that 850,000 jobs were created in June. The unemployment rate was 5.9%. This figure is very encouraging since the jobs report from the prior two months was so poor.

Originally, economists had hoped that by June the economy would add about one million jobs monthly for at least a month or so. Because the April and May jobs report was so poor, economists reduced their expectations to only 700,000 jobs for June, so the actual number beat their most recent forecasts.

As the economy continues the rapid growth that started last May, the unemployment number will fall further and could be less than 5% by year-end or shortly thereafter. How fast is the economy growing?

The second quarter of this year just ended. In about three weeks, the GDP growth rate for the quarter will be announced. The consensus view is that the economy grew at about a 9% annual rate. That means for the past 12 months, economic growth has been more than 12%. This represents a very rapid recovery from the deep, but short-lived recession in 2020.

Next week, BLS will announce the consumer price index (CPI) for June. So far this year, the CPI has been very high. In…