Strong Job Gains, for Second Month, Reframe Economic Outlook

After months of conflicting signals and economic uncertainty, it became clear on Friday that the American jobs machine has moved back into high gear.

A report from the Labor Department that said employers added 255,000 jobs in July had been eagerly anticipated on Wall Street, in Washington and on the campaign trail, and the much-better-than-expected showing immediately rippled through all three arenas.

Stocks surged, experts expressed more confidence that the Federal Reserve was likely to raise interest rates at least once this year, and it was evident that long-stagnant wages for ordinary workers were advancing at a more robust pace.

“This was everything you could have asked for, maybe more,” said Michelle Meyer, head of United States economics at Bank of America Merrill Lynch. “We’re seeing new entrants into the labor market, which implies a longer runway for the business cycle.”

And with the political conventions completed, the buoyant jobs numbers have major implications for the presidential campaigns of Hillary Clinton and Donald J. Trump.

Not only does the new data undercut Republican arguments that the recovery is faltering, it also suggests that after years of paltry gains, deeply frustrated ordinary workers are finally seeing some benefits from the drop in unemployment, which was unchanged last month at a relatively low 4.9 percent.

Wages are up 2.6 percent over the last 12 months, a much healthier pace than earlier in the recovery, and many economists expect that growth to accelerate later this year and into 2017.
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“The idea that Republicans are touting, that the job market is a wreck, is clearly belied by the data,” said Jared Bernstein, an economist who served in the Obama administration. “What matters most to people isn’t G.D.P. growth, it’s jobs and wages.”

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