U.S. jobs recovery finally looking less temporary

May 6, 2011

By Agnes T. Crane
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Federal Reserve Chairman Ben Bernanke saw green shoots in the U.S. economy more than two years ago. The labor market may at last be growing roots to match. Nonfarm payrolls swelled by a larger-than-expected 244,000 in April, according to data released on Friday. That makes three consecutive months of solid gains.

If the current pace of job creation continues, it will still take two years and five months just to win back the remaining 7 million of the 8.7 million jobs lost after the U.S. recession began in December 2007. But that’s a significant improvement on the 39-month timetable based on the pace of job growth two months ago.

Moreover, the latest jobs figures hold out a glimmer of hope for those hit hardest — workers who haven’t held a job for 27 weeks or more. In April, their ranks thinned by nearly 300,000 and they represented a smaller share of all unemployed workers. If the trend continues, that’s good for them and also reduces the potential social and economic damage from long-term joblessness.

It’s important not to overstate the gains. Many Americans are still struggling amid a sagging housing market and relatively high unemployment, despite the extraordinary stimulus thrown at the U.S. economy. But the data do suggest that recovery is steadily taking hold. The news lifted the gloom that had settled over global financial markets, putting an end to the tailspin on Thursday and early Friday. The price of U.S. oil has stabilized at around $100 a barrel. Silver, meanwhile, was finally able to catch its breath after its free-fall earlier in the week.

The data should also give Bernanke’s Fed something to chew over. The central bank is not expected to raise interest rates until next year. But with its latest massive bond-buying program due to end next month, the U.S. central bank also needs to think about beginning a reversal of that effort by trimming its $2.7 trillion balance sheet. If the labor market keeps improving, that will add to the urgency by making it even harder for the Fed to continue arguing it isn’t throwing fuel on the inflationary fire. Bernanke may need to sharpen his pruning shears in a hurry.


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“It’s important not to overstate the gains.”

You did. You got sucked in by the headline number. Check the “employment level” data on the BLS web site, report no. LNS12000000 (http://data.bls.gov/timeseries/LNS12000 000?years_option=all_years&periods_optio n=all_periods) and you’ll see that the employment level actually fell by 190,000 jobs in April.

Posted by Pete_Murphy | Report as abusive

You know whenever I read these editorials the authors always fail to mention the 350-400,000+ workers getting laid off every week.

This week the number was like 475,000.

I have a question:

If in April 1.4 million people get laid off and the jobs report says payrolls swelled by a larger than expected 244,000 does that mean that 1.64 million jobs were created?

Also what about the 150,000+ people per month retiring and going on Social Security? Did you ever consider how they might be making the jobs numbers look better?

Just curious.

Posted by Harry079 | Report as abusive