At long last, the private sector seems to be coming to the American economy's rescue. Enterprises added 176,000 jobs in April, according to the jobs report released by the Bureau of Labor Statistics on Friday, while the private sector grew by 4 per cent in the first quarter. Higher payroll taxes, tight state budgets and sequestration downsizing aren't preventing employment gains. Uncle Sam's version of austerity by stealth looks to be working.
April's jobs report was very strong overall; in addition to the 165,000 total jobs added, revisions to previous months' data added a further 114,000, wiping out much of the weakness in the March report. Employment additions were consistent across most sectors, with food services and hospitality showing robust growth. Though construction lost jobs in April, it has added an average 27,000 jobs per month over the last six months, with housing giving an additional zip to the economic recovery that had previously been lacking.
It's notable how strong the US economy has been in the face of substantial government austerity, combining the January fiscal cliff deal with automatic spending cuts that took place in March - the so-called sequester. In the first three months, the federal deficit was $307 billion, according to the Treasury's monthly statement, compared to $457 billion in the same quarter of 2012, a swing to austerity of an annualised $600 billion, or 3.8 per cent of GDP. Far from causing a surge in unemployment, that belt-tightening has been accompanied by unexpected jobs market strength. Of course, Federal Reserve chairman Ben Bernanke's monetary stimulus doesn't hurt, especially in boosting the construction and housing sectors.
The structural problems of long-term unemployment remain and will need to be reckoned with over time. Labour force participation was stuck at 63.3 per cent in April, the lowest level since 1979. But robust, broad-based private sector job creation is the best way to limit long-term unemployment and entice those who had given up on the job market into gussying up their resumes again. April's job report gives optimism that may just happen.
April's jobs report was very strong overall; in addition to the 165,000 total jobs added, revisions to previous months' data added a further 114,000, wiping out much of the weakness in the March report. Employment additions were consistent across most sectors, with food services and hospitality showing robust growth. Though construction lost jobs in April, it has added an average 27,000 jobs per month over the last six months, with housing giving an additional zip to the economic recovery that had previously been lacking.
It's notable how strong the US economy has been in the face of substantial government austerity, combining the January fiscal cliff deal with automatic spending cuts that took place in March - the so-called sequester. In the first three months, the federal deficit was $307 billion, according to the Treasury's monthly statement, compared to $457 billion in the same quarter of 2012, a swing to austerity of an annualised $600 billion, or 3.8 per cent of GDP. Far from causing a surge in unemployment, that belt-tightening has been accompanied by unexpected jobs market strength. Of course, Federal Reserve chairman Ben Bernanke's monetary stimulus doesn't hurt, especially in boosting the construction and housing sectors.
The structural problems of long-term unemployment remain and will need to be reckoned with over time. Labour force participation was stuck at 63.3 per cent in April, the lowest level since 1979. But robust, broad-based private sector job creation is the best way to limit long-term unemployment and entice those who had given up on the job market into gussying up their resumes again. April's job report gives optimism that may just happen.