Business World

Sunday 25 March 2018

Jobs boost but concern at slow recovery rate

Alexandra Frean

THE United States recorded its biggest increase in employment in three years in March, but the addition of 162,000 jobs failed to boost optimism about the economy significantly.

The Labour Department's figures include 48,000 temporary workers hired for the decennial US census, which is under way. This number was lower than the 100,000 census hirings expected by economists. Hiring in the private sector was greater than expected, with 123,000 new jobs -- the most since May 2007.

Christina Romer, US President Barack Obama's top economic adviser, said the employment report showed "continued signs of gradual labour market healing", but added: "Further targeted actions to spur private sector job creation are critically needed to ensure a more rapid, widespread recovery."

The data contrasted with gloomy testimony before the House Appropriations Committee last month from Timothy Geithner, the treasury secretary, who suggested that the administration did not expect to see job growth "substantially over 100,000 per month" for the rest of the year, adding that "the unemployment rate is likely to remain elevated for an extended period".

In fact, manufacturers added 17,000 jobs in March, the third straight month of gains, while temporary help services gained 40,000 jobs and healthcare 37,000. Leisure and hospitality added 22,000 and even the construction sector recorded a small gain of 15,000.

The Labour Department also revised up January's job total to show a gain of 14,000, from a previous estimate of a loss of 26,000. The figure for February was also revised higher by 22,000, compared with a loss of 14,000. The figures come after data earlier in the week showed US factories were ratcheting up production. The Institute for Supply Management's manufacturing index rose in March to 59.6, from 56.5 the month before. Figures above 50 indicate expansion.

But the figures show that the overall unemployment rate, taking account of the increase in the size of the labour force, have remained unchanged at 9.7pc, leaving economists concerned about the slow pace of the recovery. The data also indicate that the number of Americans registered as long-term unemployed -- jobless for more than six months -- rose by nearly 7pc, or 414,000, to 6.5 million, more than double the number of a year ago.

Paul Ashworth, an economist with Capital Economics, said the pace of jobs' growth was tortuously slow. "Unfortunately, we still think employers are adding temps because of uncertainty about the sustainability of the recovery rather than because they have been caught out by an unexpectedly strong rebound in demand," he said.

He added that the 0.1pc decline in average hourly earnings for all employees between February and March was also disappointing: "There is a danger that falling wages could become a regular occurrence, not just a one-off." (© The Times, London)

Irish Independent

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