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Does a great jobs report actually reflect economic growth?

This week’s jobs report showed terrific numbers, but we’ve been here before.

As he often does, economist Justin Wolfers probably summed up the new jobs numbers best on Twitter today.

Yep, the figures were pretty great. The economy added 288,000 new jobs in June. The unemployment rate fell from 6.3 percent to 6.1 percent. Participation managed to hold steady while the employment-to-population ratio even edged up a little. Meanwhile, jobs numbers for April and May were revised higher.

So how good should we feel going into the holiday weekend? Is the economy finally rousing itself after all these drowsy post-recession years? I think there’s some reason for optimism, especially given the fact that employers kept hiring while the economy retracted during the winter. Companies may finally feel good enough about the future to keep adding to their payrolls.

On the other hand, as Neil Irwin points out at the Timeswe’ve been here before. Below, I’ve graphed out a three-month rolling average of U.S. job creation. The labor market is almost back to the pace it hit in January 2012, after which employment growth took a nosedive.

us_job_creation_1.png.CROP.promovar-mediumlargeJordan Weissman

It’s also possible, Irwin points out, that schools juiced this month’s numbers a bit by staying open later into the summer to make up for days lost because of the miserable winter weather. And as Wolfers notes, there’s always a margin of error of +/- 90,000 jobs on each of these reports. For now, we have some good news—but it’s too early to tell if we’re reaching a new new normal.

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