Better Labor Market Here to Stay in 2012

(3BL Media) March 9, 2012 - The good news is that the improved pace of job growth continued in January and February. The really good news is that this pace of job creation looks like it could be sustained through spring and summer, and possibly even pick up. Healthy job gains in manufacturing have continued, and the even brighter news is that state and local employment have turned positive, an uptrend that may have staying power. One key has been consumer spending, which has remained high enough to spur more moderate growth in service-sector jobs, and some increase in consumer optimism. The big key will be the pace of income growth going forward. The paychecks from all these new jobs, along with continued modest growth in hourly wages, are likely to boost optimism and provide the spending power to drive consumption—and, in turn, new rounds of employment growth. The Great American Job Machine is waking up.

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Jonathan Liu
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Jonathan.liu@conference-board.org