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Jobs Roar Back With Gain of 287,000 in June, Easing Worry

Quashing worries that job growth is flagging, the government on Friday reported that employers increased payrolls by 287,000 in June, an arresting surge that could reframe the economic debate just weeks before Republicans and Democrats gather for their conventions.

The official unemployment rate did rise to 4.9 percent, from 4.7 percent, but that was largely because more Americans rejoined the work force. And average hourly earnings ticked up again, continuing a pattern of rising wages that brought the yearly gain to 2.6 percent.

“Wow, this one takes my breath away,” said Diane Swonk, an independent economist in Chicago.

An unexpectedly grim employment report in May combined with Britain’s vote to leave the European Union had fanned wider concerns that the American economy was in danger of stalling. During its meeting last month, the Federal Reserve unanimously decided to postpone increasing the benchmark interest rate.

But the latest Labor Department report, Ms. Swonk said, gives the Fed “a cushion” to consider a bump in rates later this year.

Financial markets rallied on the announcement, with the Standard & Poor’s 500-stock index gaining 1.5 percent to end the day just short of the record close it recorded last year.

But the political response was relatively muted, in deference to the shootings of police officers in Dallas. Both presidential candidates canceled campaign events, and the presumptive Republican nominee, Donald J. Trump, tweeted that he had postponed a scheduled speech on economic opportunity.

At the moment, though, the Democrats are best poised to take advantage of the positive employment news.

Lynn Vavreck, a professor of political science at University of California, Los Angeles, said that when it came to presidential elections, the economic trend was more important than any particular number. “As long as it’s going in the right direction,” she said, “that’s a good sign for the incumbent party.”

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Striking Verizon workers were missing from the May employment numbers, but they have returned to work.Credit...Nicole Bengiveno/The New York Times

Concerns persist about the vitality of the economic recovery, which reached the seven-year point this month. And perhaps nothing highlights the reality that every monthly jobs report provides only a fleeting and incomplete picture more than the giddy swing between May’s revised gain of 11,000 and June’s 287,000. (A strike by more than 35,000 Verizon workers had artificially held down May’s totals.)

Still, Friday’s report, showing the largest single monthly job expansion since October 2015, helped whisk away some of the cloudiest forecasts. The three-month average of monthly gains rose to 147,000, after taking into account the Labor Department’s revised estimates that showed 6,000 fewer jobs were created in April and May than previously reported. June’s figures will be subject to two more revisions.

“This report should ease any fears that a persistent slowdown or recession is coming soon in the U.S.,” said Dean Maki, chief economist at Point72 Asset Management. “The service sector is where the real strength is, with 256,000 hires. But the gains were widespread across sectors.”

Mr. Maki pointed out that the vigorous report was in line with several other encouraging signs. New claims for unemployment benefits have stayed at rock-bottom levels. Consumer spending is strong. The manufacturing and service industry indexes have jumped. And the number of unfilled jobs, 5.8 million in April, is at a record since the survey began.

Hillary Clinton, the Democratic standard-bearer, has emphasized the steady economic improvements during President Obama’s two terms and the steep decline in the jobless rate from the recession’s peak of 10 percent.

While acknowledging the economy “isn’t yet where we want it to be,” Mrs. Clinton has argued that the United States is “stronger and better positioned than anyone in the world.” She has endorsed a higher minimum wage, expanded paid leave, more money for job training and a multibillion-dollar infrastructure plan.

Many Americans, though, particularly those with fewer skills and less education, have yet to enjoy the recovery’s rewards. Their deep-rooted discontent with the economy has been repeatedly voiced by Mr. Trump, who has opposed what he calls “job killing” trade deals. He has promised to impose high tariffs as a way of reversing the decline in manufacturing jobs, and to deport immigrants.

There are other weak spots. Republicans can point out that real median household income is lower than it was a decade ago. And a broader measure of unemployment that includes discouraged job seekers, as well as those who would prefer to work full time instead of part time, is still nearly twice the official jobless rate, despite ticking down to 9.6 percent in June.

The proportion of people employed or actively looking for work has also been dragging along at low levels, suggesting that more people would return to the work force if desirable jobs were available.

Tom Perez, the labor secretary, conceded there was “still a lot of work to do.”

Unemployment for African-Americans, for example, whose jobless rate is typically about twice that of white Americans, rose last month to 8.6 percent from 8.2 percent.

But Mr. Perez said that the broad-based job growth across sectors showed that the economy was resilient.

Though the jobless rate, which is based on a separate survey of households, rose in June, it “went up for a good reason,’’ Mr. Perez said. ‘‘We’ve got more people looking for work and re-entering the work force.”

The tighter labor market is nudging up wages. David Lukes, chief executive of Equity One, a commercial real estate investment company, is one of several employers who said they had increased salaries and benefits to retain current staff members and attract new ones.

“I’ve had the troubling experience of losing good employees,” said Mr. Lukes, who has offered perks like flexible hours and stock incentives to keep the competition at bay. “Reward programs are much more important than they were three, four and five years ago.”

He said that for the kind of workers he was looking for — administrators, sales representatives, accountants, paralegals, construction managers — the labor pool is not that deep.

Given that the jobless rate has consistently been at 5 percent or lower since last fall, several economists argue it is time to adjust the benchmarks for what is labeled a strong or weak report.

“There’s no question that job growth is significantly slower today than it was one or two years ago,” when the average monthly gain routinely topped 200,000, Andrew Chamberlain, chief economist at Glassdoor Economic Research said. “But that is to be expected at this point in the economic cycle.”

Taking account of the growing numbers of retiring baby boomers and the population growth, a monthly gain of 75,000 to 100,000 jobs is sufficient to keep the unemployment rate steady, Mr. Maki at Point72 Asset Management said.

Ian Siegel, co-founder and chief executive of ZipRecruiter, which aggregates job postings and distributes them to job seekers, said that demand was down from the peaks of 2015, but hiring was still strong in health care and warehousing.

Skilled workers in particular have more employment options.

“I travel all over the country and everywhere I go, I sit down with C.E.O.s and ask them what their No. 1 problem is,” Steve Rick, chief economist at CUNA Mutual Group, which provides insurance and financial services for credit unions nationwide, said. “They say, ‘Just finding qualified people, from a teller to a mortgage home officer.’”

A correction was made on 
July 8, 2016

Because of an editing error, an earlier version of this article misstated when the economic recovery began. It was in June 2009; it is not in its seventh month.

How we handle corrections

Follow Patricia Cohen on Twitter:@PatcohenNYT

A version of this article appears in print on  , Section A, Page 1 of the New York edition with the headline: Jobs Surge, Easing Worries and Reframing the Political Debate. Order Reprints | Today’s Paper | Subscribe

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