Comment on U.S. Bureau of Labor Statistics Employment Situation Report

Kathy Bostjancic, Director of Macroeconomic Analysis, The Conference Board

Resilient Job Market

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Aug 02, 2013, 09:16 ET

NEW YORK, Aug. 2, 2013 /PRNewswire/ -- With a gain of 162,000 jobs in July, the surprisingly resilient labor market sustained moderate job gains this spring and summer, even with the sequester (cut in federal government spending) and a weak global economy. The self-sustaining trend in employment growth is likely strong enough to allow the Federal Reserve to begin tapering its quantitative easing by the end of the year. The strong recovery in housing helps to offset some of the fiscal headwinds. As a consequence, manufacturing added a little to its payroll this month. The service sector continued to greatly expand its workforce. This was especially true with respect to business services and the leisure and hospitality industries. Business needs the extra help given the expectation of improved final domestic demand through the second half of 2013. Gains, not just in jobs but in wages as well, can make that happen. Short of a major shock (a major hurricane or a financial or fiscal crisis), the economy and the labor market are on course to improve over the next few months, and that is consistent with the trend in The Conference Board Leading Economic Index and the Consumer Confidence Survey.

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