Jobs picture improving: White House’s Goolsbee

By Caren Bohan and Pedro da Costa

WASHINGTON (Reuters) – The U.S. job market is gradually rebounding from a period of severe retrenchment but still has a long way to go, President Barack Obama’s top economic adviser said on Friday.

“We’re starting a recovery, but it’s a deep hole,” Austan Goolsbee, head of the White House Council of Economic Advisers, told Reuters Insider.

“Even though (the unemployment rate) has come down significantly over the past four months, it’s still too high,” Goolsbee said.

The Labor Department on Friday reported the fourth straight monthly drop in the U.S. jobless rate, which fell to 8.8 percent in March from 8.9 percent in February, and was down a full percentage point since November.

The economy generated 216,000 new jobs last month, an improvement over February’s 194,000, but little comfort to the 13.5 million Americans still out of work.

The employment report also showed average hourly earnings remained flat.

But Goolsbee argued that despite stagnant readings on wages, the United States was now experiencing a more healthy pattern of growth that is less dependent on consumer spending.

“We’re seeing the rise of an export-led boom rather than one fueled by bubbles or false credit,” he said.

Other data pointed to strength. The Institute for Supply Management’s closely watched survey of manufacturing managers reported consistently strong activity, though prices paid showed their highest reading since July 2008.

Still, outside factors like higher oil prices and the Japanese disaster have dented consumer confidence, casting doubt over whether the recent progress on the jobs front can be sustained.

Data showing a 1.4 percent drop in construction during February — against Wall Street forecasts for a 0.1 percent dip — was not a good omen. Some experts fear that without a housing rebound, the economy will have trouble maintaining the recent rate of expansion of around 3 percent.

Positive recent growth data and hawkish talk from some Federal Reserve officials have sparked speculation about possible near-term tightening by the Federal Reserve.

But Fed Chairman Ben Bernanke has not hinted that he favors pulling back on monetary accommodation.

(Reporting by Caren Bohan and Pedro da Costa; Editing by Kenneth Barry)

Jobs picture improving: White House’s Goolsbee