Private employers drastically cut job creation during May 2010, according to a government report released on Friday.
Initially, the report appeared to show positive trends in the job market, with 431,000 jobs being added across the US - the highest figure since March 2000. However, all of these jobs were in fact created merely for the purpose of the nationwide census that takes place once every 10 years, said the Washington Post.
Within the private sector, only 41,000 jobs were created, which is far less than the 218,000 added in April, and the 180,000 jobs private sector employers had anticipated.
Although the 411,000 people hired by the Census did help to boost the economy and drive down unemployment rates, these jobs will no longer exist after the Census has been completed and will therefore do nothing to improve the nation's economy in the long run.
The survey also revealed that the number of persons employed part-time for economic reasons (sometimes referred to as involuntary part-time workers) declined by 343,000 in May to 8.8 million. These individuals were working part-time because their hours had been cut back or because they were unable to find a full-time job and now that private employers have cut job creation so severely, it seems this trend is set to continue for some time.
Recession's rippling effects
Statistics also reinforced the lasting effects of the recession and the long road to recovery that the US labor market is still slowly travailing. The national unemployment rate, which is calculated using a separate household survey, fell only moderately, to 9.7 percent in May from 9.9 percent in April and there are still approximately 15 million people who want to be working but cannot find a job.
Some sectors that were growing are now shrinking again. Construction employers, for example, added 41,000 jobs in March and April after months of decline, but then eliminated 35,000 of these jobs in May.
"While today's jobs report shows gains, it's a significant setback following four consecutive months of accelerating growth," said Bart Van Ark, chief economist at the Conference Board, a business research group. "Manufacturing jobs gains are at best tepid, and a lack of significant growth in construction, financial services, and information show several sectors aren't yet on the recovery path."
Wall Street viewed the latest figures as extremely disappointing and a possible indicator that recovery from the recession has come to a standstill.
On Friday, after the government report was released, the Dow Jones industrial average plummeted by 323.31 points in its third worst slide of the year. The index closed below 10,000 for the second time in two weeks. All the major indexes were down more than 3 percent.
"On the surface [the employment figures] look great," claimed Joel Naroff, president of Naroff Economic Advisors. "But that beauty was only skin-deep. The private sector is not out there hiring like crazy."
In fact, industry analysts believe that unemployment will remain high (around 7 percent) for at least two years and, according to an Associated Press-GfK Poll, only one in five members of the American public considers the economy in good condition.
