Comment on U.S. Bureau of Labor Statistics Employment Situation Report: Kathy Bostjancic, Director of Macroeconomic Analysis, The Conference Board

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May 04, 2012, 09:15 ET

NEW YORK, May 4, 2012 /PRNewswire/ --

Temporary Cooling
The 115,000 gain in nonfarm payrolls in April is another disappointment and heightens concerns that economic momentum is slowing. Coupled with the March slowdown in employment, April's lackluster performance signals that overall GDP growth may recede to slightly below 2% in Q2. However, in line with recent increases in The Conference Board Leading Economic Index® for the U.S., we expect employment and economic activity to reaccelerate moderately in the second half of the year, with real growth picking up to around 2.5%. Underlying economic fundamentals are improving, albeit slowly. Compared to last year, consumer sentiment and spending are stronger this year, and housing is less of a drag on economic growth. Going forward, wage growth may become more critical than job growth. Sustained moderate job gains and any pickup in wages will put a floor beneath consumer sentiment and spending that could, in turn, fuel moderate employment gains in "core" services (which excludes health and education). Nevertheless, this remains a weak economy, and the job counts in March and April — which have come in at considerably below 200,000 per month — may perhaps continue right through the summer.

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