With the tax cut more than 160 million middle class Americans received more money on their paychecks but the tax cut will expire soon this will slow down the job creation and output growth. This will affect the consumer spending. This is a good sign for Obama.
Sunday, December 4, 2011
Jobless Rate Dips to Lowest Level in More Than 2 Years
Even with the Euro crisis debt the unemployment rate drop to 8.6%, the lowest in 2.5 years. Part of the reason was that more than 120,000 jobs were created and 315,000 people simply stopped applying for jobs. 64% participated in the work force. Also companies have been taking more part time and temporary workers rather than hiring people and they cut low wages salary. Jobs in the retail sales and auto sales have increased and businesses are able to loan from banks.
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While the fact that unemployment dropped and more jobs were created last month is great, the fact that labor force participation dropped means that unemployment did not really drop as much as it at first appears. However, the article also discusses some elements that are definitely good things for the economy, such as the fact that the hiring intentions of small businesses are at their highest level since the collapse of Lehman Brothers. It seems that there are both good and bad signs for the US economy, so we will just have to wait and see what happens to the economy and unemployment.
ReplyDeleteAlthough unemployment has decreased because of lower labor participation it should be looked at with skepticism as these people who are now not looking for work will either depend on social benefits or their spouses income which will terribly lower the standard of living.
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