Five signs US job market may finally be accelerating
By Josh Boak, AP
April 8, 2014, 12:15 am TWN
WASHINGTON--Few people responded to the March U.S. jobs report with cheers. But there may be reasons to applaud in the months ahead.
Hiring in March was close to the economic recovery's steady but hardly explosive monthly average of the past two years: 192,000 added jobs. The unemployment rate remained 6.7 percent for the second straight month, according to the government's report Friday.
That wasn't the blockbuster figure predicted by some economists, who figured hiring would take off in March after a winter when factory orders, home sales and auto buying were slowed by severe weather.
Yet tucked into the March jobs report and other recent indicators were hints of stronger job growth ahead:
Hiring over the past 12 months has outpaced population growth. More workers in the prime 25- to 54-year-old age group are finding jobs. The winter freeze was less destructive to hiring than had been assumed. Layoffs have declined since February. And an increase in hours worked suggest that incomes will rise.
Here are five signs that the U.S. job market may finally be picking up:
1. Job Growth Vs. Population Growth
For much of the recovery, the economy suffered from a fundamental problem: The U.S. was adding more people than jobs.
Employers hired 2.4 million people in 2012. That sounds decent. But it's less impressive when you consider this: The working-age population swelled by 3.8 million that year, according to the employment report's survey of households. A similar gap existed in 2013.
The share of the population with jobs — the so-called employment-population ratio — ended both 2012 and 2013 at 58.6 percent. That was down sharply from 63 percent before the recession started in late 2007.
But encouragingly, the trend reversed itself in March: About 2.35 million people were hired over the preceding 12 months. That was slightly more than the rise in population over the same period. The employment-population ratio ticked up to 58.9 percent, its highest level since August 2009.
When an economy adds fewer jobs than people, it loses some ability to accelerate. The economy is carrying more weight and less muscle.
Some of this reflects an aging population: More baby boomers are retiring. But another factor is that some people who hunkered down at colleges during the recession have emerged with new degrees and brighter career prospects. And they've started to look for jobs.
Can the gains continue? Tough to say. But the U.S. is faring better than it should considering that the vast baby boom generation has begun to retire.
2. Prime-Age Workers Are Returning