"The U.S. economy added 113,000 jobs last month, according to the government. That's an improvement from December, but was far weaker than hoped. Economists had been expecting an addition of 178,000 jobs."The report shows the lowest unemployment in 5 years. However, it does not necessarily show that the economy is now better off than it previously was, since a lot of long time unemployed people have dropped out of the labor force. Participation rate, as reported, is "still hovering around its lowest level since 1978".
On a lighter note, according to the statistics, much of January jobs gain came from traditional blue collar sector. Could this be an indication that manufacturing jobs are starting to shift back to the US? We will look forward to future reports.
Article: "Job growth remains weak" by Annalyn Kurtz from http://money.cnn.com/
With the bitter cold that much of the nation experienced throughout January, it is possible that the lack of economic growth may have been due to that. With temperatures this month starting out much higher than they were through last month, it could be that things will look a bit brighter by the end of February.
ReplyDeleteIn regards to manufacturing jobs, it still does not seem likely that the US economy will be supported by them again. Wages here are much higher than in other countries who currently are manufacturing-based economies, partially due to the power unions have here. This allows for other countries to produce manufactured goods at much lower costs, causing the goods to be sold at cheaper prices. With our similar goods being sold at higher prices, demand would be lower than it would be for goods from Country B, who has lower prices. This makes it seem unlikely that we can depend on the manufacturing sector to hold up the US economy.
The American work force consists of 155 million workers.Only 1/3rd i.e 50.million have a college degree or more where as 73 million workers have a high school diploma or some college and 11 million workers have not finished high school.
ReplyDeleteFor economic growth , Mr. Ethan Harris,co-head of global economics at Bank of Merrill Lynch predicts that" We won't see stronger wage growth until unemployment gets below 6% and we begin adding 200,000 jobs a month".
Thus it is a very competitive market where workers cant negotiate. Thus this has a huge impact on economic growth and wage growth.
The article says that we are at the lowest level of unemployment in more than 5 years, but it is because more and more people are dropping out of the labor force. This is puzzling, as the article states that only 63% of Americans are classified as in the labor force. This will take into account the unemployment level, but why are people not wanting to work, why are they not in the labor force? Are they discouraged, have they given up?
ReplyDeleteYeah I think that's pretty much what the article says. A lot of people have given up searching for jobs.
DeleteI just read an article where the unemployment rate has stayed the same, but more and more people are dropping out of the labor force. Not to mention, like the article said the last two months have not been good in terms of job growth. It will interesting to see if the Fed and government will do if they decide to change things.
ReplyDelete