In April 2011, the US unemployment rate rose to 9.0% from 8.8% in March 2011. This was worse than market expectations for the rate to remain unchanged at 8.8%. This month, the labour market participation rate remained unchanged at 64.2%, which is still the lowest level since 1984.
During the month of April, total non-farm payrolls rose by a further 244 000, which was above market expectations for an increase of 185 000. There was also a modest upward revision to the previous two months data of +46 000.
During 2010, the US economy created 940 000 jobs, or an average of 78 000 jobs per month. That is below the estimated 100 000 increase in the number of people entering the job market every month. However, in the past three months the job gains have averaged a very respectable 233 000 a month, and appear to be on a sustainable upward trend.
Encouragingly, the private sector added 268 000 jobs in April 2011. This was above the market expectation for an increase of 200 000. The US private sector has added jobs in each of the past fourteen months, at an average of 149 000 net new jobs a month.
Since December 2007 (when the US recession officially started), payroll employment is still down a net total of 6.95 million, or 5.0%. This is a big improvement relative to the peak decline of 8.74 million recorded in February 2010.
In the month of April 2011:
- Employment in retail trade rose by 57 000. Within the industry, employment in general merchandise stores increased by 27 000, offsetting a decline of similar magnitude in the prior month. Elsewhere in retail trade, April job gains occurred in electronics and appliance stores (+6 000), building material and garden supply stores (+6 000), and automobile dealers (+5 000).
- Employment in professional and business services continued to expand in April, with an increase of 51 000. Job gains occurred in management and technical consulting services (+11 000) and in computer systems design and related services (+8 000).
- Employment in temporary help services was little changed over the month, following an increase of 34 000 in March.
- Health care continued to add jobs in April (+37 000). Within health care, job gains continued in ambulatory health care (+22 000) and hospitals (+10 000).
- Employment in leisure and hospitality continued to increase in April (+46 000). Over the past 3 months, this industry added 151 000 jobs, with nearly two-thirds of the growth in food services and drinking places.
- Employment in both state government and local government continued to trend down, with April losses concentrated in the non-educational components.
- Elsewhere in the service-providing sector, employment in information, financial activities, and transportation and warehousing changed little in April.
- In the goods-producing sector of the economy, manufacturing employment rose by 29 000 in April. Since reaching an employment low in December 2009, manufacturing has added 250 000 jobs, including 141 000 in 2011. Over the month, employment growth continued in machinery (+5 000), primary metals (+4 000), and computer and electronic products (+4 000).
- Mining added 11 000 jobs in April. More than half of the gain occurred in support activities for mining. Since a recent low point in October 2009, employment in mining has increased by 107 000.
- Construction employment was just about unchanged in April. This industry has shown little net movement since early 2010, after having fallen sharply during the prior 3 years.
Overall, this month’s labour market report recorded another significant improvement. There is little doubt that labour market conditions have improved meaningfully in the past few months; the one concern is the surprising and sharp rise in the weekly jobless claims since the beginning of April (see chart attached). Hopefully this is due to seasonal adjustment factors rather than reflective of a reversal in the recent improving trend in jobless claims.
Given the structural economic difficulties in the US (housing market overhang, loss of production activity to China etc), it appears likely that employment will take a number of years to fully recover from the great recession, however, there is little doubt that the US labour market is well past the worst and finally showing a more sustainable upward trend which should strengthen the current economic recovery.
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