US Unemployment Rate Eased And Non-Farm Private Sector Payrolls Picked Up
US unemployment rate eased to 9.5% of total labour force in June, from 9.7% in May. This was the second straight month of easing and the lowest level in 11 months, due partly to a 652,000 drop in the labour force, after falling by 322,000 in the previous month, as some Americans grew discouraged over hiring prospects. Non-farm payrolls, on the other hand, fell by 125,000 jobs in June, after recording an increase of 433,000 jobs in May. This could be dragged down by a drop in temporary workers employed by the government in census jobs, which contributed to a decline of 208,000 jobs in the government sector in June, compared with an increase of 400,000 jobs in May. The hiring of temporary workers might have peaked in May and the unwinding of census employment will likely distort the payroll figures in the months ahead as the government dismisses workers when the count is completed. Employment by the private sector, however, picked up to 83,000 jobs in June, after falling to 41,000 jobs in May, indicating that non-farm private sector are still recruiting workers, albeit cautiously. The pick-up in non-farm jobs in the private sector was due to jobs creation in the services industry, which rose by 91,000 jobs in June, compared with an increase of 20,000 jobs in May. This was mainly on account of a pick-up in jobs in professional & business services, education and leisure & hospitality sectors as well as a smaller decline in jobs in retail trade sector. These were, however, offset partially by a sharper decline in jobs in financial and IT services sectors as well as a slowdown in recruitment in the manufacturing sector. As a whole, a gradual improvement in the job market will help sustain consumer spending in the country. Nonetheless, the high level of unemployment rate suggests that the improvement in consumer spending and the US economy will likely be gradual.
The World Economy... - 5/7/2010
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