The United States labour markets continued to be buffeted by the economic downturn, with a mere 54,000 payroll employment jobs added in May, which left the overall unemployment rate essentially unchanged at 9.1 per cent.
The grim news came when U.S. Bureau of Labour Statistics released its monthly jobs report, in which it said although private-sector employment continued to trend up with a net addition of 83,000 jobs, even that figure was a much smaller amount than the average for the prior three months, which was 244,000.
Reacting to the negative news, even as President Barack Obama continued to keep job creation at the top of his 2011 policy agenda, the Chairman of the Council of Economic Advisers, Austan Goolsbee, said, “There are always bumps on the road to recovery, but the overall trajectory of the economy has improved dramatically over the past two years.”
While he sought to focus attention on private-sector job growth arguing that this sector added more than 2.1 million jobs over the past 15 months, Mr. Goolsbee conceded that the unemployment rate was “unacceptably high and faster growth is needed to replace the jobs lost in the downturn.”
The slowdown in the jobs growth rate comes at a particularly challenging time for the Obama White House, as the recent clashes with the U.S. Congress over raising nation’s the debt limit are likely to put the brakes on any further initiatives to boost employment. In this context Mr. Goolsbee noted, “We will continue to work with Congress to responsibly reduce the deficit and live within our means.”
Thus while numerous measures such as the payroll tax cuts and business incentives for investment have already been implemented and may well have contributed to employment growth thus far, even Mr. Goolsbee admitted that the latest BLS report “is a reminder of the challenges that remain.”
Most worrying for the current administration must be what the BLS report indicates about stalled recovery in the manufacturing, real estate and construction sectors. The report said that employment in some manufacturing areas actually dipped in May, with 5,000 jobs being lost.
Construction employment was essentially unchanged in May, the report said, noting that employment in the industry has “shown little movement on net since early 2010, after having fallen sharply during the 2007-09 period.”
Further the report suggested that states and local governments were continuing to reel under deficit pressures. Employment in local government declined during May, by 28,000 jobs. In fact since an employment peak in September 2008 local governments in the U.S. have lost 446,000 jobs, the report cautioned.
Yet Mr. Goolsbee struck a note of hope on the employment-boosting policies of the administration. He said, “We are focused on promoting exports, reducing regulatory burdens and making the investments in education, research and development, and infrastructure that will grow our economy and create jobs.”
