Date: September 3, 2010
US Employment Situation, July 2010 Results
Source: United States Department of Labor, Bureau of Labor Statistics
Link to Release: http://www.bls.gov/news.release/pdf/empsit.pdf
Summary: The American economy shed 54,000 jobs in August as temporary workers hired for the US census continued to complete their work and were subsequently laid off. In total, census-related layoffs drove a 114,000 job decline in the government sector. Private sector employment actually edged up by 67,000 positions. The largest private sector gains were in healthcare and construction. It should be noted, however, that the majority of construction job gains were due to workers returning to their jobs following a strike. The manufacturing sector shed 27,000 jobs.
Analysis: The US labour market situation report for August presented a good news/bad new story. Obviously three straight months of declines following a short lived period of recovery was not good news. At the same time, however, the job losses in August were much smaller than most commentators were expecting following disappointing economic growth in recent months. The fact that the private sector actually saw positions increase was another positive storyline. With this said, the US economy needs to create 300,000+ jobs on a monthly basis for a sustained period of time before the unemployment rate will trend downward in any meaningful way. Personal consumption, which historically accounts for over 70 per cent of US GDP, is being hampered by the lack of confidence brought about by the high unemployment rate, which in turn hampers job creation. This drag on US GDP growth is problematic for US trading partners like Canada, who provide raw materials, finished goods and services to meet US consumer demand. The potential ripple effect of sluggish US recovery on Canadian economic fortunes is clear.
Source: Toronto Real Estate Board
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