Why March-April's Job Gains Will Collapse This Summer

Every spring for the last three years, the business press and government policy makers declare with great fanfare that the job market in the US has finally turned the corner; sustained recovery in job creation has begun. But every summer following their pronouncements, the opposite occurs: employment and job creation retrenches from the spring and declines.

In recent months, the US Labor Department has reported that jobs for March and April 2011 grew by more than 200,000 each month. Apart from the fact that 130,000 new workers enter the labor force each month, and, therefore, the "net" gain is really only 70,000 (and a third to half of gains represent part time and temp workers), the 200,000 jobs represent an apparent relative improvement over the dismal job creation picture since last June 2010. But appearances are deceptive, and sometimes even false.

How real is the job growth in recent months? And will it continue for the remainder of 2011? Our answer to the first query is "not very" and to the second, "not likely." Here's why.

If the past three years, 2008-2010, are any indicator, employment gains that occur in the spring are not a true, reliable indicator of actual job creation. And the gains of this spring will once again likely disappear in the coming summer-fall of 2011.

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