Jobless Filings Decline for a Second Week, Lifting the Economy

The latest reports on the US economy indicate a slight lift as unemployment rate decreases and the number of unemployment benefit applications declined by about 6000 to a seasonally adjusted 472,000. The article suggests that this decline could be due to the fewer layoffs as company's are no longer laying off in the panic-stage of the recession cycle. Also, the demand for labor increased as productivity dramatically declined as firms realized they could no longer squeeze work out of the smaller labor force for a lower wage. The decline in applications for unemployment benefits could be due to the extended benefits contracts many workers are on. I believe another reason is the increase in 'discouraged workers' as they leave the unemployed label. The labor costs have increased as workers need more incentive to continue to be productive. This increase in demand, alongside the calmer attitude of the firms regarding hiring and layoffs, should help increase job openings and thus lower unemployment in a way where productivity is increased and the economy benefits too. The housing sector still remains weak as demand has still not picked up even though the mortgage rates are the lowest they have been since 1971. The manufacturing industry is also moving slow, even though the transportation sector is doing comparatively better than other sectors in the industry. The consumers are still in fear of the recession and the consumer spending is slow which is can be harmful to the growth and stimulation of the economy. A great factor that would help the economy is if the FEAR of investors, consumers, firms and shareholders would shift to focus on reviving the economy.
In my opinion, the government tax cuts to stimulate investment are a good idea to help the economy. Greater investment is likely to lead to more jobs, hence increase the purchasing power of consumers.