Good news from the job markets. According to today’s news, the nations unemployment rate fell to 8.8% with private-sector payrolls increasing by 230,000 jobs. This is the second month in a row that the private sector is gaining jobs by over 200,000. The results came in stronger than expected by economists.
While an increase in jobs is always welcomed, there are some indicators that prevent us from getting overexcited. Job growth occurred mostly in the service sector, mainly in health care and leisure. While health care is taking advantage of the crippled health care reform (no major changes for the industry), the growth in leisure indicates a seasonal rise. It has to be seen how the numbers develop in the near future to determine if this a seasonal spike or serious growth connected to a stronger economy. Also, government jobs continue to decline and could erase job growth in other sectors and put a drag on the overall job market.
Concerning is also the stand still in the average hourly earnings. With an increase in inflation that will leave less money in citizens pockets.
Overall, a drop of unemployment from 9.8% in November to 8.8% in March is a positive sign. The financial markets reacted immediately and rose.