The ever-present fear of a "jobless recovery" in the US was allayed, at least temporarily, yesterday with the publication of much improved employment data.
While job creation continues to fall behind the recovery in the American economy more generally, the trend is increasingly positive, economists said.
The "jobless recovery" has been a feature of American political debate for some time. However, the latest official US Employment Report showed that payrolls grew by 192,000 in February, a significant improvement on January's 63,000.
Although analysts said the US needed to create 200,000 jobs a month to ensure stable employment, a small reduction in the workforce saw the unemployment rate edge down from 9 to 8.9 per cent.
The average monthly gain in jobs for January and February amounts to 145,000, in line with the average for the fourth quarter. The upward trend is thus not yet strong enough for the labour market to stage an assured recovery.
Manufacturing, which was hitespecially hard during the recession, rebounded with 33,000 new jobs. Construction also bounced back from an exceptionally cold andinactive winter, creating another 33,000 jobs. Despite a more cautious approach to reducing their Budget deficit, US state and local government departments saw employment figures drop by 30,000.
"Most indicators suggest that an acceleration in private employment growth from around 150,000 per month to 200,000 per month is on the way," said Nigel Gault, chief US economist at IHS Global Insight. "February was too influenced by the better weather for us to conclude that it signals the break-out, but almost all of the other incoming evidence suggests that faster employment growth is on the way."
Bart van Ark, chief economist at The Conference Board, added: "While the increase in employment continues to lag the pick-up in the broader economy, it is encouraging to see the job numbers moving."
However, Mr van Ark also warned: "Assuming an aggregate productivity trend, including government, of about 1.5 percent, the economy would need to grow well beyond 3 per cent in order to double the trend to anaverage of 200,000 jobs over the next couple of months. With a shrinking government, a stagnant construction sector and a small manufacturing base, only consumer spending can generate that kind of improvement in hiring."Reuse content