Last month’s jobs report was a strong one. We added 288,000 jobs, bringing the second-quarter average growth rate to 272,000 jobs per month. Meanwhile, the unemployment rate dropped for good reasons—because people found work, not because people stopped looking. Indeed, last month’s report made me unusually optimistic; at a growth rate of 272,000 jobs per month, we would get back to a healthy labor market in early 2017. That would still mean that the Great Recession, all told, will have caused roughly ten years of weakened labor market opportunities for American workers, but at least there’s light at the end of the tunnel.
So July’s jobs numbers, which will be released on Friday, will help answer the all-important question: have we really kicked it into higher gear? A jobs number north of 270,000 would be a pretty clear sign that the answer is yes—but anything much less than that would push us back to “we have to wait and see” territory. Unfortunately, consensus forecasts are for job growth around 235,000—if true, that sets us back to growth rates that put health in the labor market more than three years away.