UPDATE 1-Jobs picture improving–White House’s Goolsbee

(Updates with manufacturing, construction spending data, adds
background, details)

By Caren Bohan and Pedro da Costa

WASHINGTON, April 1 (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)

UPDATE 1-Jobs picture improving–White House’s Goolsbee