Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Sunday, 8 June 2014

US economy adds 217,000 jobs...again (employment back to pre-crisis levels)

Recovery continues

The Bureau of Labor Statistics released its non-farm payrolls data and, yet again, the US economy added a hefty 217,000 jobs in May.

And that strong figure comes off the back of another heavy print of 282,000 jobs added in April.

Total employment in the US has now returned to its pre-crisis level.

As the population has grown since that time, the unemployment level remains at 6.3%, which is a great recovery from the double digit levels of a few years ago, but shows that the recovery still has some way to run to take unemployment back down to the sub 4.5% level it was at before the recession began (click image):

Ever since the US economy recovery started a recurring theme has been bearish pundits saying that it's not a recovery.

You can keep trying to rail against it, but the numbers tell a different story, which is to say, 44 consecutive months of employment growth, which is rapidly closing in on the all time US record of 48 consecutive months.

If you think that's not a recovery, I reckon you need help reading charts.

The payroll data in the world's largest economy is strengthening, and that's great to see.

Warning shot

In spite of this, there is something to watch out for, and that is how US stock markets react when the quantitative easing stimulus is eventually wound back.

Stock markets have been rising relentlessly in the US for more than half a decade now, oftentimes both on the back of good news (recovery imminent!) and bad (more stimulus for longer!).

As a result both the Dow and S&P 500 are into uncharted territory, threatening unprecedented levels of 17,000 and 2,000 respectively.

Correction due...