After months of conflicting signals and economic uncertainty, it became clear on Friday that the American jobs machine is continuing to perform at a high level.
A report from the Labor Department that said employers added 255,000 jobs in July had been eagerly anticipated on Wall Street, on Main Street and in Washington, 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 healthy pace.
"This was everything you could have asked for, maybe more," said Michelle Meyer, head of U.S. 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."
The official unemployment rate was flat at a relatively low 4.9 percent, largely because of a jump in the number of Americans looking for work and finding it.
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The employment data painted an unusually strong tableau of growth, with nearly all of the indicators that form the basis of the Labor Department's monthly jobs report pointing in the right direction.
The July increase in payrolls stands in sharp contrast to numbers released just last week showing disappointing economic growth in April, May and June. Part of the reason for the difference is that parts of the economy are still suffering from the continuing fallout from low oil prices as energy companies cut back on investment. At the same time, companies seem to prefer to to hire more workers for now rather than invest in new equipment and increase their efficiency and output.
"It's been a really good summer for hiring all across the country," said Tom Gimbel, chief executive of LaSalle Network, a recruiting and staffing firm based in Chicago. "Business has been great. Kids coming out of college are getting hired, and we're seeing a lot of activity in the $50,000 to $150,000 category."
Over the ast six months, the economy has added an average of 189,000 jobs a month, Meyer said, stronger than she had expected.
In late spring, the government reported that job creation in May was much weaker than what economists had expected, but a big rebound in June similarly caught the experts off-guard. Those back-to-back, night-and-day versions of the economy's trajectory left many experts confused, but the July data helps clear up much of that mystery.
"This is a validator," said Michael Gapen, chief U.S. economist at Barclays. "This is a report that indicates that the slowdown in hiring earlier in the year has been reversed."
June's gain was revised upward by 5,000 jobs, and May's by 13,000. The combination of better gains in the spring and July's jump in hiring suggests that the Federal Reserve is likely to have a more vigorous debate about raising interest rates when it meets in September.
The Fed said in July, after the most recent meeting of its policymaking committee, that the economy was growing more strongly and there were fewer clouds on the horizon, suggesting it was giving greater consideration to rate increases later this year.
The strength of job growth in July is likely to reinforce that assessment. But it still is not expected to push the Fed to raise rates in September. An increase in December is more likely.
The jobs data is certain to reverberate not only for policymakers at the Fed, but also for Hillary Clinton and Donald Trump as November's presidential election draws closer.
The tepid data released last week for second-quarter growth offered an opening for Republicans to question Democratic arguments that the recovery was delivering meaningful gains for most Americans. But the combination of strong hiring and rising wages gives new life to the argument that the recovery is strengthening, not faltering, as it enters its eighth year.
"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 GDP growth, it's jobs and wages."
Bernstein, who is now a senior fellow at the Center on Budget and Policy Priorities, continued: "While you can point to some indicators that are underperforming, the labor market isn't one of them, and that's where the rubber hits the road for most working households."
Still, many measures of unemployment suggest joblessness is higher than the official 4.9 percent, although nowhere near the 42 percent level Trump suggested last fall.
The broadest measure of unemployment calculated by the Labor Department, which includes workers who want full-time work but cannot find it, stood at 9.7 percent in July. It inched up 0.1 percentage point last month but is down from 10.4 percent a year ago.
Not all part-timers are necessarily seeking full-time work, however — working mothers, returnees to school and older workers often fall into this category. July's report showed the number of Americans working part time for noneconomic reasons to have risen by more than 200,000 to 20.7 million.
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Both of the tallies used by the Labor Department to gather information on the job market showed healthy conditions.
The payroll figures, which reflect hiring at companies and in the public sector, revealed broad-based job gains, not just in lower-paid sectors like retail and leisure and hospitality, but in high-paying fields like professional and business services as well. As has been the case in recent months, the government provided an extra tailwind, adding 38,000 jobs last month.
The household survey, which has offered a mixed picture in the past, was also robust. The unemployment rate was unchanged, but the participation rate rose as more than 400,000 Americans joined the labor force by going directly from not working to a paid job.
The unemployment rate for high school dropouts, which has been elevated throughout the recovery, fell more than a full percentage point to 6.3 percent. That was the biggest move since March of 1999, when unemployment stood at 4.2 percent and companies were scrambling to find workers.
The labor market is nowhere near as tight as it was then, but July's figures do suggest that employers who had previously ignored these lower-skilled workers were taking a second look.
Wages also reflected the signs of stronger demand for employees, with average hourly earnings rising 0.3 percent in July, bringing the 12-month gain to 2.6 percent. As the unemployment rate has fallen, some employers have raised salaries to retain their best workers and attract new ones.
Increases in the minimum wage in many states recently, plus increases in the lowest-tier salaries by big employers like Wal-Mart, Target and Aetna, are also beginning to ripple through the broader workforce.
On Monday, Minnesota raised its minimum wage by 50 cents, requiring large employers to pay workers $9.50 an hour, while smaller firms must pay at least $7.75. On July 1, similar increases went into effect in Maryland, Oregon and the District of Columbia.
Still, a two-tier job market has emerged in many ways across the United States, with workers in the same region facing radically different conditions depending on their level of education and skills.
In San Francisco, even the most junior software engineers hired at Sunverge, a maker of energy storage systems for solar electricity users, command starting salaries of just over $100,000. A more experienced director of software development might earn up to a quarter-million dollars a year.
A little more than 60 miles to the east, at Sunverge's assembly plant in Stockton, California, however, where the unemployment rate is 9 percent, new blue-collar workers can expect to earn about $14 an hour, or $29,000 a year. That's $4 more an hour than California's minimum wage of $10.
Sunverge is bulking up in both cities; the company's workforce is expected to grow to about 100 by the end of the year, from 70. But hiring technical talent is much more time-consuming, said Stu Statman, Sunverge's chief of engineering.
"It doesn't seem like it's that hard to find good factory workers in Stockton," Statman said. "In San Francisco, if you're talking about software engineers or developers, it's very hard. It takes a long time, and there's a huge amount of hunger out there for people with these skills."
On the policymaking front, William C. Dudley, the president of the Federal Reserve Bank of New York and an influential adviser to Janet L. Yellen, the Fed's chairwoman, said on Sunday that current economic conditions called for "caution in raising U.S. short-term interest rates."
Among his reasons: The Fed's current policy is less accommodative than it may seem, because global interest rates have declined; the weakness of the rest of the world poses a risk to domestic growth; and if the American economy should falter, the Fed's ability to help is relatively constrained. Other officials have also sounded a cautious note in recent weeks, although insisting they have not decided against a rate increase later this year.
Yellen is scheduled to speak this month in Wyoming, and her remarks will be closely watched for hints of the Fed's direction.