The employment creation figures in June, released last week by the Labor Department, confirmed that the U.S. economy is performing better. With 195,000 new jobs created in June, the average monthly job creation in the U.S. during the first half of this year rose above 200,000.
Still, this was not enough to push down the unemployment rate, which remained unchanged at 7.6 percent.
The private sector in June created 202,000 new jobs, while the public sector kept losing jobs at an average of 3,000 per month. The federal government alone in the last four months has lost 40,000 jobs as a consequence of mandatory budget cuts and tax increases.
Princeton professor Alan Blinder estimates that these last fiscal measures probably reduced U.S. economic growth "by about 1.5 to 2 percentage points."
According to the Department of Commerce, during the first quarter of this year, the U.S. economy grew 1.8 percent. Therefore, Mr. Blinder concludes, without what he calls "fiscal self-punishment," economic growth this year could approach 4 percent.
By sectors, leading job creation was in hospitality and leisure, with 75,000 new jobs, and retail, with 37,000. Even construction jobs increased, due to improvements in the housing market.
In contrast, manufacturing lost 6,000 jobs in June, the sector's third monthly loss in a row.
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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OCTOBER 30, 2014
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