U.S. employment data out this week were disappointing, because 95% of all net job creation was due to temporary government census workers, the American Chemistry Council (ACC; Arlington, Va.; www.americanchemistry.com) says in its latest Weekly Chemistry and and Economic trends report.
Job creation driven by temporary workers is not sustainable, ACC says, and "it is private sector job gains that will be fundamental to a self-reinforcing expansionary cycle."
Overseas, the unemployment rate rose to 10.1% in the Eurozone in April. The situation is likely to worsen because of the uncertainty created by the European debt crisis and fear that it will spread to more countries.
Meanwhile, industry reports suggest manufacturing "continues on a roll," ACC remarks, led by exports, inventory restocking and business investment. For example, in April, Brazil’s industrial production was up by 17.4% over a year ago at the same time. ACC points out that the JP Morgan global manufacturing survey is signaling "continued expansion of activity" in May.
In their June 4 report, ACC also suggests that the wider economy is entering an important phase. "The economy is at an important period of transition from an initial inventory- and stimulus-led recovery toward a self-sustaining virtuous cycle led by the private sector," the report states.
As the new phase begins to take hold, ACC expects the pace of economic growth to slow in the second half of the year.