Economy is finally picking up steam, but there's a catch

NEW YORK - The economic recovery is picking up steam. The Labor Department reported Thursday that the economy created 288,000 jobs last month and the unemployment rate fell two-tenths of a point to 6.1 percent.

That is the lowest since the financial meltdown nearly six years ago.

With a surge in June hiring, the U.S. economy appears to be gaining momentum. Nearly 1.4 million jobs have been created so far this year.

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Economist Michael Hanson is with Bank of America Merill Lynch. He says the economy finally seems to be gaining traction.

"It looks that way. I mean, obviously, there've been a lot of false dawns," he said.

Not only was job growth in June strong, but the previous two months were revised up as well: May to 224,000 jobs created and April to 304,000. That's the strongest monthly increase in more than two years.

Hanson says the economy is on its feet again.

"We're walking a little bit more briskly than we were six months ago. I don't know if we're running. But we're getting there," he said.

The unemployment rate is lowest among workers with college degrees. But many, like 28-year-old Elizabeth Thompson, still feel underemployed. A journalism major, she earns about $28,000 a year as an editorial assistant at Staten Island Parent Magazine.

"The main thing is that I always worry that I'm not going to ever be able to make enough just to make a solid living. You know, that's probably my biggest worry," she said.

A study by the New York Fed found that 40 percent of recent graduates can't find jobs that fit their education level.

"You gotta work really hard because you're not gonna graduate and say, 'Well, I got a bachelor's so give me that job!' because that's not how it works," Thompson said.

The surge in hiring is not boosting wages, which have risen just 2 percent over the past year, about the rate of inflation. And weekly wages have actually fallen in the past two months.

  • Anthony Mason

    CBS News senior business and economics correspondent; Co-host, "CBS This Morning: Saturday"