Job creation is probably first among the measures Americans use to assess the state of the economy. In that regard, June’s 288,000 new jobs, the fifth straight good month, was a positive sign.
The numbers for April and May were also adjusted upward and unemployment in June dropped to 6.1 percent, down by two-tenths of a percent from the previous month.
But there are still problems, based on other gauges. One of these is that Americans’ wages have been stagnant since 2001, which hurts an economy that is heavily dependent on consumption.
Flat wages also mean the nation’s income and assets cluster increasingly in the hands of wealthy Americans, and that undercuts the American dream: Work hard, use your money wisely and ascend the ladder in society. Instead, it’s work hard, go deeper into debt and do not aspire to a better quality of life.
June’s job creation figures caused the stock market to react favorably, with the Dow Jones industrial average topping 17,000 for the first time before retreating in the past few days.
It is encouraging that the Federal Reserve Board has apparently decided to end in October its program of quantitative easing, in which the Fed injected money into the economy by purchasing bonds.
These purchases amounted to $85 billion a month for years, which the banks were supposed to loan out to spur the recovery. Instead, some banks were reluctant to make sufficient loans and basically put the money in their reserves, at a time when they were paying big bonuses to their executives or buying assets overseas.
Another disappointment is the fact that the nation’s gross domestic product shrank by 2.9 percent in the first quarter of the year, having been adjusted further downward last month. That was blamed on a cold winter. If the second quarter shows comparable shrinkage, America’s economic misery will only deepen.