US Jobs Boom As Election Approaches

08 June 2004

An additional 248,000 Americans moved into paid non-farm employment during May, reports the US Labor Department. Paradoxically, however, the unemployment rate remained constant at 5.6%.

This apparent anomaly, explained the government agency, was due to the entry onto the labor market of "many more" people seeking work.

Over the three months from February, around one million jobs have been created -- the biggest increase for any comparable period May 2000 [the dying months of the Clinton administration].

Whooped economist Ben Herzon at St Louis forecasting firm Macroeconomic Advisers: "The economy is on a strong and rising path. Output has been strong for some time now and we've been saying jobs will come, and now they're coming."

Manufacturing industry added 32,000 jobs, its fourth straight monthly increase. The service and construction sectors also registered an [unstated] increase, while the only major employment category to decline was government.

However, there is a downside to this encouraging news. Interest rates are almost certain to rise at the Federal Reserve's monthly meeting on June 29-30.

Says former Fed governor Laurence Meyer of the latest employment data: "[It] would have had to have been extraordinarily disappointing to pull the Fed back from tightening in June. This just reinforces the importance of beginning to move now."

Data sourced from: The Wall Street Journal Online; additional content by WARC staff