The latest surge in US job creation suggests the world’s biggest economy is gathering momentum — in contrast with the recession taking hold in parts of Europe.
Analysts said that in the US, where the economy added 243,000 net new jobs last month to pull down the unemployment rate to 8.3 percent, the flexibility of the labor market was key.
Economists said the US economy is shaking off the debt woes of the eurozone, where unemployment has hit 10.4 percent, the highest since the creation of the single currency.
About 1.9 million US jobs have been created in the past five months, bringing the number of people working nearly back to the levels of late 2008.
Jacob Kirkegaard, economist at the Peterson Institute for International Economics, said the latest developments in the labor market show the resilience of the US economic model.
“When you’re a US employer, you barely hesitate to hire because you know if you take a worker for a peak in business, you can easily lay off that person if it doesn’t turn out as planned,” he said. “In Italy, in Spain, in France, in Greece, the costs for that are high.”
The National Association of Manufacturers said the latest US numbers “show renewed strength in the domestic economy, with employment growth in almost every major industrial sector except information, financial services and government.”
Alexandre Douzet, president of recruitment firm TheLadders, said he sees considerable momentum in the US, with many companies planning increased hiring in the coming 12 months.
“This is true for sectors which up to now have been retrenching or cutting their staffs,” such as retailing and construction, he said.
“No one wants to say this in public, but all the US chief executives are saying privately that 2012 will be a good year,” Douzet said.
Job gains have averaged 201,000 a month in the past three months and some economists say the broad improvement reflects a rebound from the woes that derailed last year’s labor recovery, including the Japanese earthquake and the US federal debt battle in Congress.
Alexei Monsarrat, a global economist at the Atlantic Council, said he also sees a potential for more improvement.
“Companies put aside a lot of cash during the crisis,” he said. “The US corporate bond market has also been good. Now that confidence is back, they have the financial capacity to increase their payrolls.”
In Europe, by contrast, Monsarrat said, the challenges are still formidable.
“First, the initial shock of the financial crisis and then the impact of the sovereign debt crisis, are much more severe than for the US,” he said. “It’s not surprising that it takes longer to recover.”
DIFFERENT IN EUROPE
Monsarrat added that European firms are highly dependent for financing on banks, which have been hardest hid by the eurozone debt crisis.
Kirkegaard said the latest developments show the US economy leading the global business cycle.
“So it’s logical that the US gives the impression of coming out of recessions quicker,” he said.
However, the two major economic blocs are not completely delinked. A study by IMF economists Tamim Bayoumi and Trung Bui suggested that a rise in US GDP of 0.8 percent over two years will add 0.6 percent to the eurozone economy.