NEMA’s electroindustry May 2010 - 25

Economic Spotlight
› Labor Market Improving, but Facing Prolonged Recovery
The U.S. labor market is showing increasing signs that it has finally turned the corner. According to data from the federal Bureau of Labor Statistics, payrolls posted their first sizable increase in more than two years in March, adding 162,000 net new jobs. (March was the latest month for which data were available when this issue of electroindustry went to press.) The return to job creation, tentatively at this point to be sure, marks a significant milestone on the road to self-sustaining economic growth, and lowers the probability that the economy was slip into a double dip recession. Higher employment levels are likely to drive personal income, and, in turn, consumer spending and home sales, higher in the future. Nonetheless, the labor market has a long way to return to even its pre-recession state, as March payrolls lagged their December 2007 peak by 8.2 million. Though job growth is expected to continue, the structure of the labor market is in flux; many unemployed, particular those coming from the shrunken housing and financial sectors, will be forced to acquire new skills and find new jobs in new industries, a process that will prolong what is already expected to be a lengthy recovery. The unemployment rate has held steady at 9.7 percent for the first three months of 2010, down from a cyclical peak of 10.1 percent in October 2009. This most watched indicator of labor market vitality, the ratio of the unemployed to the labor force, is expected to linger above 9 percent into late 2011. It may actually creep higher in the near term, even as the absolute number of jobs available in the economy increases, since discouraged workers will return to the labor force when they perceive their job prospects have improved. ei Tim Gill, Director of Economics | tim_gill@nema.org
NEMA electroindustry

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May 2010

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NEMA’s electroindustry May 2010

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