The slowdown in job creation in March and April is at least partly due to early-year hiring by seasonal industries such as retail, leisure and hospitality. A surprising surge in job creation in January and February cut into subsequent hiring. Still, job creation averaged 200,000 a month for the first four months of the year, slightly ahead of our forecast of 185,000 a month for 2012. That's up from 150,000 monthly in 2011.
Unemployment, now 8.1%, will likely end the year around 8%. Despite the solid net gain in jobs, the jobless rate won't fall much because the improving economy will lure more people into the workforce after the past several very tough years for would-be workers. Labor participation -- the share of the working-age population either employed or actively seeking a job -- is the lowest it has been since 1981.
With ample evidence that the U.S. economy will continue to grow at a moderate pace this year, job creation should pick up again in the months ahead. Consumers and business managers express confidence that the economy is improving. Small-business owners, who do much of the hiring in the early stages of an economic expansion, say they expect higher sales and more hiring. The Federal Reserve reports continued growth in every area of the country.
But it will remain a tough market for job seekers. More than two years after the end of the Great Recession, the number of workers unemployed for more than 27 weeks is 5.3 million, or 44% of the jobless. Though down recently, that share is much higher than it ever was before 2009.
Simon Hayes, a Senior Research Analyst at Edmund Rome said "We monitor world markets and analyse data around the clock to ensure we keep our clients ahead of the market. Based on our research, we are very confident that the tide is slowly but surely turning back in our favour."
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