Government reports for
April 2005 suggest both
job creation and income
growth are holding up
their end of the
recovery. 274,000 Jobs
were generated in April
causing the employment
report to be the most
upbeat news about the
economy in weeks.
It appears employment
rose across all sectors
except manufacturing.
Last month's
unemployment rate was
unchanged at 5.2%, well
below 6.3% of 2 years
ago. According to Jared
Bernstein, economist at
the liberal Economic
Policy Institute, the
April numbers tell you
that employers are
feeling more optimistic
about the economy
Nonetheless,
forecasters are
reluctant to declare the
recovery "back on
track." First, we must
deal with a spike in oil
prices and job
uncertainties remain.
Despite the recent
hiring surge, the April
report indicates that
the number of people
seeking Jobs outpaces
the demand for their
services. The average
time the unemployed
spent looking for a job
ticked up to 19.6 weeks.
James Glassman of
J.P. Morgan Chase is
reluctant to change his
estimate of economic
growth due to continued
uncertainty about oil
prices. In fact, he has
lowered his forecast for
economic growth to 3% in
2005 from 4%.
Last month's job
creation was strongest
among construction
companies which added
47,000 workers, followed
by restaurants, bars,
etc. which increased
their payrolls by
35,000. Health care was
up 25,000; phone
companies added 9,000
employees; and movie/TV
production increased
7,000. Yet
manufacturing, which
lost employment every
month for the past 7
years, was down another
6,000 workers.
