Job market showing signs of life
But bulk of new hiring in May likely temporary census jobs
WASHINGTON Fewer people are filing claims for unemployment aid, new jobs are showing up in service industries, and companies are squeezing all they can from lean staffs and may need to hire soon.
Hopes for the job market brightened Thursday ahead of a closely watched report on the nation’s employment picture – although experts cautioned that the economy probably isn’t creating jobs as quickly as usual after a recession.
“While we will see a period of job growth, it is going to take a long time to get back the jobs we lost,” said Mark Zandi, chief economist at Moody’s Analytics, who predicts the nation will not recover the 8 million jobs lost in the downturn until 2013. Zandi says it will take until 2015 to get back to full employment, which he defined as a jobless rate of around 5.5 percent.
Economists predict the May jobs report, due out today, will show the nation added 513,000 jobs in May. But most of them, as many as 400,000 by some estimates, will be temporary government jobs to help with the census.
The unemployment rate is expected to fall slightly, to 9.8 percent from 9.9 percent.
While analysts say layoffs will keep tapering off and companies will gradually hire more, a lack of strength throughout the economy complicates the recovery.
Americans’ appetite for spending has eased. Manufacturing output has been strong, but that’s mostly because businesses are replenishing their stockpiles after slashing them during the recession.
Unless Americans pick up the pace on spending, manufacturing could fizzle. And consumer habits are closely tied to employment and wage growth.
“We have a very mixed picture at the moment,” said Nigel Gault, chief U.S. economist for IHS Global Insight.
Gault said the economy is probably growing slightly faster now than in the first quarter of the year, but the boost is coming from temporary factors, like the homebuyer tax credit that expired at the end of April.
“This is a very soft recovery compared to what you would normally see after such a deep recession,” Gault said.
Hiring may pick up if businesses find they can’t wring more work out of thinner ranks. Productivity grew in the first quarter at the slowest annual pace in a year – 2.8 percent, the Labor Department said Thursday.
A separate report Thursday showed first-time claims for unemployment aid fell for a second straight week. Still, the decline came after a sharp increase three weeks ago.
And claims, considered a measure of how willing companies are to hire, remain at elevated levels. The four-week average of jobless claims is down only slightly from mid-January.
The service sector, a broad category ranging from construction to retail to health care, accounts for about four of every five U.S. jobs outside of farms. It expanded in May for the fifth month in a row.
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