Employment growth accelerated in June, suggesting that the fragile economic recovery continues despite the reported sharp contraction in the first quarter.

The economy added 288,000 payroll jobs and the unemployment rate fell to 6.1 percent, the lowest rate since before the worst days of the financial crisis in September 2008, the Bureau of Labor Statistics reported Thursday morning. Both measures exceeded expectations.

The details of Thursday's jobs report were stronger than the headline numbers. The news should allay fears that the sudden contraction in economic output in the first quarter was the first sign of an oncoming recession rather than an outlier.

Although the Bureau of Economic Analysis reported last week in its final estimate of gross domestic product that the economy shrunk at a 3 percent rate through the first three months of the year, the continued and relatively strong job growth throughout the first five months suggests that the recovery is still in place and is even gaining momentum.

Economists expect economic growth and employment to move together – a relationship known as “Okun’s Law.” Okun’s Law implies that the negative 3 percent growth in the first quarter should have translated into a higher unemployment rate.

But after five months of data about employment growth, it now appears that Okun's Law has been temporarily suspended, or, more likely, the GDP decline in the first quarter was a fluke. The unemployment rate has fallen by half a percentage point since the start of the year, and job growth in 2014 has been significantly stronger than in the previous years of the weak and slow recovery.



Along with other recent encouraging news regarding other economic indicators, such as recovering inflation and improving business and consumer confidence, the employment numbers should increase confidence that the recovery remains intact.

With upward revisions to the estimates for payroll gains in May and April, the average number of monthly jobs added over the past three months has risen to 272,000. Over the past year, the average monthly job growth is just over 200,000, and in that time the number of unemployed Americans has fallen by 2.3 million as the unemployment rate has declined 1.4 percentage points, according to the BLS' survey of households.

June's unemployment rate decline was the result of jobless workers finding positions, not because of people quitting the job hunt. The labor force participation rate -- the share of Americans with jobs or looking for work -- remained steady at 62.8 percent. Labor force participation remains near the lowest level since the late 1970s, reflecting both long-term demographic changes and cyclical weakness in the labor market.

Underemployment also decreased in June. The U-6 unemployment rate, a measure that includes not only the unemployed but also those forced into part-time work and people working intermittently, ticked down from 12.2 to 12.1 percent. Over the past year, the U-6 rate has declined by almost two full percentage points.

The household survey also indicated improvement in long-term unemployment, which at roughly a third of total unemployment remains unusually high. The number of those out of work for 27 weeks or longer fell by 293,000, to 3.1 million. Over the past year, the ranks of the long-term jobless have fallen by 1.2 million, although it is not clear how much of that change was due to workers giving up on the job search rather than finding positions.

One disappointing note in Thursday's otherwise encouraging report was a sizable 275,000 increase in the number of workers forced into part-time jobs — the majority of the roughly 400,000 employment increase counted by the household survey.