The winter downfall in the US economy has been followed by a rebound in job creation. Last week, the Labor Department said 223,000 new non-farm jobs were created in April, which lowered the unemployment rate to 5.4 percent, from 5.5 percent. Additionally, 85,000 new jobs were created in March, as a result of a downward revision from 123,000.
This was seen as an indication that the meager 0.2 percent economic growth, estimated for this year’s first quarter, will be revised to a contraction projected by some analysts at 0.6 percent. However, the rebound in job creation confirmed that most factors, which slowed the economy during the first quarter of this year, were transitory.
All sectors showed increased hiring in April, with the exception of mining, which including energy production lost 15,000 jobs. The strongest gains were in the higher wage sectors, such as professional and business services with 62,000 new jobs, followed by construction and health-care with 45,000 new jobs each. By contrast, wages remained stagnant, increasing 3 cents from March, equivalent to a yearly increase of 2.2 percent.
Markets reacted positively, because the rebound in job creation, together with continued wage stagnation and low inflation are perceived as insufficient to justify the expected liftoff in interest rates, at least until the central bank meeting scheduled for mid September.
*International analyst and consultant. Commentator on economic and financial issues for CNN en Español TV and radio. Former Director, UNECLAC.