Less Growth, More Jobs

By Isaac Cohen*

Throughout this year, the US economy has seen both less growth and a surge in job creation. The severe winter weather in January and February pulled down first quarter economic growth to almost nil, at 0.1 percent. However, spring surprisingly brought  vigorous nonfarm employment, at 288,000 new jobs created in April. The unemployment rate dropped from 6.7 to 6.3 per cent, the lowest level reached under President Barack Obama.

Job creation was robust in all sectors, with the exception of the federal government. The private sector created 273,000 new jobs, led by 75,000 in professional and business services and 32,000 in construction. Local and state governments created 15,000 new jobs, while the federal government lost 3,000.

The April figure pushed upwards to 238,000 the average monthly job creation for the last three months, better than the monthly average of 205,000 in 2013.

Still, most observers agreed that behind this positive performance there are at least two less positive facts. The decrease in the unemployment rate to 6.2 percent in April, again, was partly because 806,000 persons left the ranks of those who are working or are looking for a job. Additionally, wages were almost flat, increasing 1.9 percent last year, slightly over the rate of inflation of 1.5 percent.

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