This is likely to be one of the best news reports one would want to hear in this era. Approximately 257,000 jobs have been added to the U.S. economy. Obviously this good news would bring joy to more than 700,000 Americans who had given up hope of finding a job. Their hopes are now on the rise. A slight increase was therefore noted in the number of job seekers. This in turn had a negative impact on jobless people. The unemployment rate has increased by a slight percent from 5.6% to 5.7%, according to a survey released by the Bureau of Labor Statistics. The increase is a huge sign of improvement as compared to six years down the line, in January 2009. The U.S. economy had almost thrown away 800,000 jobs in the Great Recession. The start of 2009 saw around 2.3 million jobs being lost. That is surely a great number.
The last three months witnessed an increase in job creation. This was due to an increase in consumer confidence in the U.S. economy. This in turn boosted consumer spending, and thus led to job creation. Bill Hampel, chief economist for the Credit Union National Association, said that the last six months has seen a slight recovery in the labor market ever since the Great Recession. Paul Ashworth, chief U.S. economist at Capital Economics, said that the Federal Reserve will probably raise short-term interest rate by the middle of the year to counter the growth in jobs. Until now interest rate has been kept zero since the year 2008.
Industries that have benefited
Ever since Barack Obama became the president of U.S., his main focus was on the middle class. ObamaCare has given a boost to healthcare spending as well as employment. The graph shows that around 1.5 million jobs were added in the healthcare industry. This was followed by 1.4 million in food service. It has been noted that more than 60% of the new jobs that have been created have come from the top three industries –Â healthcare, food service and temp help. This phenomenon was noticed since January 2009, ever since Obama became resident.
Negative effects of the increase in jobs
However, this happy news has not gone down well with the new GOP-controlled congress. The poor and the working class will obviously feel the pinch. Chances of Keystone XL Pipeline Act getting passed are high. This act may create many jobs which in turn will make the U.S. energy independent. However, at the same time, provisions on keeping oil in the U.S. were not included in the act. The main topic of controversy here is that the State Department says that this may create a maximum of only 6,000 jobs for a period of three years. The figure predicted by Natural Resources Defense Council is much less. They predict that only 100 jobs at the most will be created by this pipeline.
Statistics
A 12-cent rise was noted in the average wages, IE. It reached $24.75. The minimum wage rate also increased in around 20 states from early this year. This increase was around 0.5%, the highest since the year 2008. The rate of inflation increased 0.8%. However, the total increase in the wage rate was 2.2% for the entire year, which shows signs of great improvement. The previous estimate was 1.9%. The Labor Department said that 423,000 jobs were created. The number is the most since May 2010. The private sector has seen an 11.8 million addition of jobs with the companies like Walmart (WMT, Financial), McDonald's (MCD, Financial) and General Electrics (GE, Financial) leading the robust growth of employment in the sector. This figure is over 59 consecutive months of job growth. Paul Ashworth said that this is the strongest pace of job growth since 1997.
David Lamb, senior dealer at Fexco said that this might be the day that economist may get what they want. The increase in the rate of jobs added is surely a reason to celebrate! Paul Ashworth lastly says that the employment growth rate is on fire and this puts a lot of pressure on the wage rate. The Feds will therefore not wait much and the interest rates will surely increase from the zero rates that it is currently standing at.
