Job growth improves — but why?

Kai Ryssdal Jun 1, 2007
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Job growth improves — but why?

Kai Ryssdal Jun 1, 2007
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KAI RYSSDAL: There were officially 157,000 new places to work in this country in May. That’s what the Labor Department told us this morning. It’s quite a bounce back from the past couple of months.

So we got Nigel Gault, U.S. economist at Global Insight, on the line to help understand where the new jobs came from all of a sudden.

NIGEL GAULT: Well, the jobs in May came as they usually come in most recent months in the service sector. We’re still losing jobs in manufacturing. Construction jobs were flat. So it was services that did all the work.

Such as?

GAULT: We were gaining jobs in health, in education, leisure and hospitality, including drinking and eating places, which is encouraging since you might think that people would cut back on eating out because of higher gasoline prices.

That’s great, but really, so what? It’s just one lousy report for just part of the economy.

GAULT: I think the main thing we can take out of this is if you put the employment together with a number of other reports, it suggests that the economy is bouncing back in the second quarter from the anemic 0.6 percent GDP growth rate in the first.

Nigel Gault from the forecasting firm Global Insight.

There were a couple of other economic odds and ends that we found out about today. One of the Fed’s key measures of inflation — something called personal consumption expenditures — rose just 2 percent in April, year over year.

That’s a bit dense, so here’s the real takeaway:

For the first time in more than a year, inflation’s right where Ben Bernanke wants it to be.

KAI RYSSDAL: There were officially 157,000 new places to work in this country in May. That’s what the Labor Department told us this morning. It’s quite a bounce back from the past couple of months.

So we got Nigel Gault, U.S. economist at Global Insight, on the line to help understand where the new jobs came from all of a sudden.

NIGEL GAULT: Well, the jobs in May came as they usually come in most recent months in the service sector. We’re still losing jobs in manufacturing. Construction jobs were flat. So it was services that did all the work.

Such as?

GAULT: We were gaining jobs in health, in education, leisure and hospitality, including drinking and eating places, which is encouraging since you might think that people would cut back on eating out because of higher gasoline prices.

That’s great, but really, so what? It’s just one lousy report for just part of the economy.

GAULT: I think the main thing we can take out of this is if you put the employment together with a number of other reports, it suggests that the economy is bouncing back in the second quarter from the anemic 0.6 percent GDP growth rate in the first.

Nigel Gault from the forecasting firm Global Insight.

There were a couple of other economic odds and ends that we found out about today. One of the Fed’s key measures of inflation — something called personal consumption expenditures — rose just 2 percent in April, year over year.

That’s a bit dense, so here’s the real takeaway:

For the first time in more than a year, inflation’s right where Ben Bernanke wants it to be.

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