Pundits all over the blog-o-sphere are declaring an end to the employment free-fall that has characterized the labor markets since last fall. Gary Burtless, a Senior Economics Fellow at the Brookings Institute, makes the case here:
April’s job loss of 540,000 looks pretty good when the monthly drop of payroll employment in the previous four months averaged 700,000. To be sure, the monthly drop in private sector jobs still looked awful in April. Part of the improvement in overall employment loss is explained by a big jump in federal government employment, much of it due to hiring for the 2010 Census. Even in the private sector, however, the pace of job loss slowed, reflecting a slower rate of employment shrinkage in both the goods-producing and service-producing sectors. It no longer looks as though the job market is in free fall. It is still in decline, but the decline is not accelerating. It may be slowing.
Remember, as I pointed out in The Unemployment Rate Doesn’t Matter, that the unemployment rate is a lagging indicator.
Although the pace of job loss has slowed, the unemployment rate will still eek forward for several quarters at least. When you see GDP turn positive you will know that you’re a couple quarters away from rising employment. In the meantime, take this good news for what it is: evidence of Bernanke’s “green shoots” in the economy.
