US economy 'on the right track' after job figure boost

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The Independent Online

New US unemployment figures suggest that the rebounding US economy is finally starting to generate new jobs - a development that will be nowhere more fervently welcomed than at George W Bush's White House.

New US unemployment figures suggest that the rebounding US economy is finally starting to generate new jobs - a development that will be nowhere more fervently welcomed than at George W Bush's White House.

After months of virtual stagnation, manufacturing and service industries created 308,000 new jobs last month - three times the total expected by economists and a vast improvement from the 21,000 non-farm jobs created in February. It was the largest single monthly jump since April 2000, at the end of the long boom which preceded the 2000/2001 recession.

Though the headline unemployment rate crept up to 5.7 per cent from 5.6 per cent, the news pushed the stock market and the dollar higher and was hailed by the Bush administration as evidence that the improvement in the economy - growing at an annual 4 per cent or more - is finally feeding into the labour market.

"We never expected the recovery to be smooth and steady; there are always fits and starts", Gregory Mankiw, the chairman of the White House council of economic advisers, told CNBC TV. "But the overall pattern of the numbers is heading in the right direction. We are now on the right track."

Polls consistently show that Mr Bush, who faces a tough campaign for re-election in November, is most vulnerable on his handling of the economy.

Democrats have relentlessly attacked what they portray as the administration's indifference to the so-called "out-sourcing" of jobs from the US to low-wage countries in Asia and Central America.

Despite the March employment surge, a net 1.8 million jobs have been lost since Mr Bush succeeded Bill Clinton in January 2001. Almost certainly, as Democrats ceaselessly point out, he will be the first incumbent to preside over a net loss of jobs since Herbert Hoover at the start of the Great Depression.

Though both the White House and the Federal Reserve insist the low rate of job creation is the result of surging US productivity rather than the cynical relocation of plants by US companies to countries like China, the issue has reverberated in closely fought states like Michigan, Ohio and Pennsylvania where the 2004 election may be decided.

Allegations of a leak surrounded yesterday's tightly-guarded figures, arguably the most market-sensitive economic data of any issued by the federal government.

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