No change in US employment situation trend

8 Mar 2013 by Jim Fickett.

For some reason the mood in the markets was lifted by the employment report but, in reality, nothing has significantly changed. It is still the case that the annual rate of job growth is extremely low compared to most past recoveries, and it still seems to be in a downtrend. If it drops much further, that will likely mark the onset of recession.

The fact that initial unemployment claims are at about the same level as a year ago suggests that the job growth rate is likely to deteriorate further:

It is true, and it is good news, that the unemployment rate continues to drop:

However despite a number of headlines, there is nothing surprising about this. As long as the annual rate of job growth (currently 1.5%) is greater than the annual rate of population growth (1.0%), one expects the unemployment rate to slowly improve.

The fundamental issue in the current US employment situation is that the rate of job growth is very low and looks very much as if it could go lower.