- Gregory Daco, head of U.S. macroeconomics
The US labour market continued to falter despite recent rebound in job creation. The Fed's exhaustive measure of the US jobs market remained at the lowest level since mid-2012, reinforcing the view economic growth failed to bounce back at the beginning of the June quarter. The labour market conditions index declined to -1.9 points last month from a steeply downwardly revised -1.8 points in March, which had originally been estimated at -0.3 points, according to the Board of Governors. The gauge is a composite of 19 various measures, of which payrolls and the unemployment rate have the biggest weight. Yet, other indicators such as jobless claims or job openings are included as well, to make the LMCI a multi-dimensional model, which provides a wider picture of the US labour market's state.
Last week the Labor Department's data showed US job growth rebounded last month after a steep setback in March. Nonfarm payrolls rose a seasonally adjusted 223,000 in April, following a revised 85,000 increase in March, down from a previously reported 126,000. Consequently, the US unemployment rate declined to 5.4% in April, down from 5.5% a month earlier. The jobless rate is moving closer to the Federal Reserve's expectation of "full" employment, with unemployment rate between 5% and 5.2%.
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