Last week, the Labor Department revealed that 175,000 new jobs were created in May, almost exactly the same as the average monthly figure of job creation in the U.S. economy during the last year. The unemployment rate increased one-tenth of a percentage point, from 7.5 percent in April to 7.6 in May, since there were more people looking for work.
After a week of concerns about the future orientation of monetary policy, the markets reacted positively. The job creation figures were seen as an indication that the central bank has no reason to change the policy of asset purchases at its next meeting of June 18-19.
By sectors, in May, there was vigorous job creation in entertainment and business services, while job losses continued in the federal government, with 14,000 lost last month.
As a consequence of ongoing budgetary reductions, during the last three months the federal government has lost 45,000 jobs. This confirms the recognition by the central bank that fiscal policy measures such as budget cuts and higher taxes are "restraining economic growth."
For this reason, the presently moderate monthly rate of job creation, at 175,000 new jobs, offers no room to be complacent. At such a rate of job creation, unemployment will reach 6.5 percent in 2015 and will fall to 5 percent in 2017.
Isaac Cohen is an international analyst and consultant, a commentator on economic and financial issues for CNN en Espaņol TV and radio, and a former director, UNECLAC Washington Office.
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