US jobs numbers in tune with weak recovery

The US jobs figures were a curate's egg - good in parts.

On the upside, the world's biggest economy is still creating jobs and the unemployment rate - which peaked at just over 10% - is coming down.

The bad news is that the pace of hiring has slowed since early 2012 and the drop in the jobless rate is the result not of stronger demand for jobs but of discouraged workers leaving the labour market.

In truth, the increases in non-farm payrolls of 200,000-plus seen at the turn of the year were flattered by the unusually warm winter, which resulted in fewer seasonal layoffs in sectors such as construction. In the past couple of months, the pace of jobs growth has slowed to a level more in keeping with an economy that is growing at an annual rate of 2% - extremely modest for a recovery period in the US.

The sluggishness of activity is reflected in the household survey of employment, which is used to calculate the unemployment rate and measures the labour market in a different way to the non-farm payrolls data.

On this measure, there was a 169,000 fall, explained by a drop of 342,000 in the civilian labour force and a 173,000 decline in unemployment. It is not a healthy sign that the workforce is shrinking since it suggests that many Americans have given up hope of finding a job.

Wages are also growing at an annual rate of just below 2% - another sign that the famous US jobs machine is still stuck in second gear. There is nothing in this report to suggest an employment boom this side of November's presidential election.