“Job market brightens as key sector grows, Congress acts” |
| Job market brightens as key sector grows, Congress acts Posted: 04 Aug 2010 06:36 PM PDT Washington • Job prospects are looking just a little brighter. The service sector, which makes up 80 percent of the economy, grew for the seventh month in a row, and state aid to preserve jobs for tens of thousands of teachers and other public employees cleared a key hurdle Wednesday in Congress. Of course, the job market still has a long way to go. A key employment report due out Friday is expected to show the nation actually lost jobs in July, mostly because of temporary census work that came to an end. "The good news is that the economy is still moving forward, but the bad news is that it is moving at a fairly moderate rate," said Sal Guatieri, senior economist at BMO Capital Markets. "At least we have enough underlying strength in the economy to keep pushing us forward." Wednesday's news seemed to satisfy investors. The Dow Jones industrial average rose 55 points in afternoon trading before settling up about 44, flirting with the 10,700 level for the first time since May. Wall Street's reaction is not so much a sign of confidence in the recovery as a sigh of relief. Weeks of dismal reports have suggested the rebound had slowed. The most encouraging development was a private trade group's report that the nation's broad service sector expanded in July. The Institute for Supply Management's index, which covers everything from homebuilders to medical transcriptionists to Google, rose to 54.3. Story continues below A reading of 50 or higher on the service index signals growth, and it hasn't been below that threshold since 2009. June's reading was 53.8, and economists were expecting a drop to 53 for July. The service sector depends heavily on consumer spending, and that has been weak since the recession began in 2007. Americans are saving more and resisting major spending sprees, a trend that the latest government reports confirmed this week. Economists also saw positive news on Capitol Hill on Wednesday. The Senate overcame a Republican filibuster and was poised to pass a $26 billion aid package to help states and local school boards cope with their budget problems. The measure and an extension of long-term jobless benefits that was approved last month would help sustain the recovery, economists said. But they don't expect any real change until employers start hiring at a faster pace. Friday's jobs report is unlikely to show that. The latest forecasts show the economy lost 65,000 jobs in July, much of it because of the lingering effect of temporary census jobs that have ended. The report should show private-sector payrolls rose by about 100,000 in July, predicted Ryan Wang, an economist with HSBC. That would be about the same pace of job growth so far this year on average. Five Filters featured article: "Peace Envoy" Blair Gets an Easy Ride in the Independent. Available tools: PDF Newspaper, Full Text RSS, Term Extraction. |
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