Peter Morici is an economist and professor at the Robert H. Smith School of Business at the University of Maryland. He is a recognized expert on international economics, industrial policy and macroeconomics.
Prior to joining the university, he served as director of the Office of Economics at the US International Trade Commission. Today, the US Labor Department reported the economy added 132,000 payroll jobs in June, down from 190,000 in May. Wages increased a moderate 6 cents per hour, or 0.
3 percent, despite surging energy and food prices. Moderate wage and labor productivity growth should help keep core inflation in check, but rising gasoline prices later this summer and pressure from the ethanol program on grain and food prices could yet ignite a wage-price spiral. In the second quarter, the economy added 440,000 new payroll jobs.
Overall, the pace of employment growth indicates the economy is expanding much more rapidly than the 0.7 percent annual GDP growth posted in the first quarter. Second quarter growth should be about 2.
5 percent or a bit higher. For the year, GDP should be up 2 to 2.3 percent.
The household survey of employment, which includes the self employed, shows the unemployment rate at 4.5 percent in June, the same as in May. More importantly, the survey indicates another 77,000 adults left the labor force, as the ranks of discouraged workers continue to swell.
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