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Food for thought: The private sector created more jobs over the past three months than during any other three-month period since 2004, and the second fastest rate in a decade. About 1.8 million jobs have been created over the past year, nearly half of those over the past three months alone. If things continue at the same rate, 2011 will be the best year for job creation since 1999.
These numbers are measly compared to the 8.6 million jobs lost from 2008-2009. But not only is the jobs market moving in the right direction, it's moving there at the fastest pace in years. Importantly, job creation is now higher than population growth, pulling those who have remained on the sidelines for much of the past three years back into the workforce. There's no overall employment boom, but there may indeed be a new jobs boom.
The picture would be even better if it weren't for a constant leak coming from the government sector. Since the recession ended in mid-2009, governments have shed nearly half a million jobs -- the opposite of the 2003-2007 economic expansion, when the government sector added 1.2 million jobs. Local governments account for most of the government job losses since property taxes -- vital to local governments -- crashed with the housing bust.
Growth in the private sector has been broad. Manufacturing added 212,000 jobs over the past year. Retail, 123,000. Health care, nearly 400,000. Leisure and hospitality, almost a quarter million. Even the auto sector, an abysmal wreck over the past decade, is perking up. Ford (NYSE: F ) and General Motors (NYSE: GM ) recently announced plans to add or bring back a combined 11,000 jobs. Three weeks ago, McDonald's (NYSE: MCD ) alone hired 62,000 workers in a single day, which should add a nice spike to next month's employment report.
Behind the jump: Not only is the economy slowly gaining steam, but employees are tapped out, working as hard as possible after companies culled staff down to skeleton crews during the recession. Productivity growth, a measure of output per hour, has collapsed to a little more than 1% after rocketing to more than 6% in 2009. This suggests that companies looking to keep production up and profits humming will have to hire more workers. The trend tends to feed on itself, as higher employment leads to higher spending, and higher spending justifies more employment.
The bigger picture is still miserable, despite the growth. Not only have millions given up looking for work, but millions more have exhausted all unemployment benefits, skewing both the unemployment rate and figures that show how many are collecting unemployment benefits. Even when official statistics are used, they're ghastly. This chart, from the finance blog Calculated Risk, sums it up best:
We may be adding new jobs at a nice clip, but the damage inflicted during the recession keeps the gains at near rounding-error status. Assuming job growth averages 250,000 per month and population growth 100,000 per month, it'd take another four or five years to return to something that looks like normal. History shows we'd be due for another recession by that time.
That's the new jobs boom: a respectable climb out of a very deep and dimly lit hole.