Job Market Insights
Hiring 66,000 temporary government workers to do a national census through the Labour Department does not hurt, but it seems the backbone of the US economy, which are the private employers, have added 231,000 jobs to the labour force last month, the most since March 2006. Job creation in April totalled 290,000, raising the jobless rate to 9.9 per cent.
Economic Confidence and Spending
With businesses displaying confidence in the economy by increased hiring, consumer confidence has also increased with noticeable spending up in March, the largest amount in five months. Job gains in were noted in manufacturing, education and health services, leisure and hospitality, construction, government and retailers. Factory production also grew in April at the fastest pace in nearly six years.
Public Perception and Economic Outlook
Still, an Associated Press Poll done in the first weeks of April show that only 21 per cent of Americans feel the current economy is in good shape. Job hiring is not expected to be aggressive enough in the upcoming months to lower the unemployment rate. The economy would need to grow at an annual rate of 6 per cent to 8 per cent each quarter to make these numbers noticeable, instead of increasing by the 3.2 per cent pace we’ve seen for the first three months of this year.
Wage Trends and Job Market Challenges
On a positive note, hourly earnings did make a slight increase to $22.47 in April, however, job cuts in April were noted mostly in information companies, transportation and warehousing. The underemployed, the combination of people who work part time and have given up seeking work, increased to 17.1 per cent in April. Also, the number of people who have been out of work for six months or longer grew to 6.7 million in April, making up 45.9 per cent of all unemployed people. In total, 15.3 million people are still out of work.
Global Economic Impact
Also thrown in to the economic mix is Europe’s debt crisis, which is expected to dampen the demand for US exports. The Europe issues are also playing havoc on local stock markets as the Dow Jones industrial average dropped nearly 1,000 points before eventually recovering only two-thirds of its losses before days end. Economists have said they feel it will take many years yet to lower the unemployment rate to a more usual 5.5 per cent range. In the meantime, many Canadians are feeling luck on their side as the local economy continues to recover at a faster pace.