Unusually bright news from the US labour market helped to dispel fears that the American economy may soon suffer a catastrophic relapse into recession.
The monthly Department of Labour data published yesterday showed that far fewer jobs were lost last month than had been feared, and most observers took some reassurance from the relatively upbeat news.
Total non-farm employment in the US fell by 54,000 in August, the same fall as was seen in July, while the statisticians also took the opportunity to revise down total job losses during the summer by 123,000.
Stripping out the 114,000 census-related lay-offs in August and a modest drop in other public-sector employment, private-sector employment – which is regarded as the key trend – increased by 67,000 last month, although that is down from the 107,000 new jobs in July.
However, economists also pointed out that employment at car plants jumped by 22,000 in July and fell back by the same number in August and an unusually small number of plants shut down this summer. However, the employment rate edged up, from 9.5 to 9.6 per cent.
The US economy has been sending out mixed messages recently. Retail sales and the property market are displaying marked weakness, while business confidence and the latest jobs data point to a more optimistic outcome.
Officials at the US Federal Reserve have been broadly "doveish". Ben Bernanke, the chairman of the Fed, said last week: "Central bankers alone cannot solve the world's economic problems but, should further action prove necessary, policy options are available to provide additional stimulus. Any deployment of these options requires a careful comparison of benefit and cost."
Bart van Ark, the chief economist of the Conference Board, added: "The economy as a whole has been weakened by a dismal housing market and slow consumption. Modest gains in private-sector jobs, coupled with the large decline in government employment, are consistent with our forecast for continued sluggish growth."Reuse content