1.4 Million Jobs Added in First Half of 2014

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) was up 86 points, or 0.51%, in early afternoon trading Thursday. This movement sent the index above the 17,000 mark for the first time in its history.

The S&P 500 (SNPINDEX: ^GSPC  ) and Nasdaq (NASDAQINDEX: ^IXIC  ) were also on the rise.

Jobs, jobs, and even more jobs!
Propelling the broad-based buying were two positive economic reports, led by the Labor Department's jobs numbers for June.

The U.S. economy added 288,000 jobs in the month, crushing analyst expectations. The unemployment rate declined to 6.1% from 6.3% in May. Each of the past five months has seen job growth in excess of 200,000 jobs, the first such streak since the 1990s.

Economists revised the reports for both May and April higher as well, bringing the total number of new jobs added so far in 2014 to 1.4 million.

US Change in Nonfarm Payrolls Chart

US Change in Nonfarm Payrolls data by YCharts.

Over the past 12 months, 2.3 million Americans have found jobs. Particularly notable is the acceleration in job growth over the past six months -- 0.9 million in the second half of 2013 versus 1.4 million in the first half of this year.

This acceleration comes as GDP declined 2.9% in the first quarter.

Wages also increased 0.2% for the month, bringing the total increase to 2% over a trailing 12-month period. Wage increases are an indication of improving growth and future economic improvements as workers have more income to spend, propelling the economy further.

Trade deficits narrow
Lost in the shadow of today's jobs report, new Commerce Department import and export data indicates that the U.S. export market is recovering as well. The trade deficit narrowed to $44.4 billion in May, driven by rising exports and a pullback in imports. April's trade deficit was revised to $47 billion.

Exports of automobiles and consumer goods led the way, growing 6.1% and 2.6%, respectively. Petroleum exports remained strong: excluding petroleum-related products, the deficit would have widened by about $200 million.

On the import side, weakness in industrial supplies and food and beverages reduced overall imports after two months of gains. Increases in imports of automobiles and capital goods slightly offset the weakness.

Despite the positive report today, economists still expect the trade gap to drag on second-quarter GDP. The U.S. economy continues to recover at a faster clip than other global powers, while growth in the emerging markets has cooled. For the next few quarters this imbalance will likely constrain exports on lower global demand, while U.S. demand will provide strength on the import side. 

More positives than negatives for the U.S. economy
Taken together, today's data releases are a major positive for the U.S. economy. Momentum is gathering in the labor market after a frustratingly slow five years of recovery. Strong data from across the economy continues to point to first-quarter GDP as a anomaly that will likely be offset by a strong number for the second quarter.

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