Wages Rise as Unemployment Rate Falls
The Labor Department Report released on Friday shows
generally positive statements with a highlight of a half point percentage
increase in average hourly earnings in January. The report also showed a
decrease in the rate of job creation, as the unemployment rate fell to an
eight-year low of 4.9 percent. The article discusses the most recent statistics
of the job market, with an emphasis on the idea that the job market could be
tightening enough to force companies to pay more to attract and retain
employees, causing the recent increase in average hourly earnings.
The article discusses the significance of this increase,
taking it as a sign that the American economy is holding up well despite a
slowdown in China, growing risks in emerging markets, and turmoil in the stock
market. Chief United States economist at Barclay's states that due to this and
other promising statistics, he doesn’t think the economy is sliding into a
recession. However, as an effect of increasing wages, one third of executives
said they were worried that labor costs could cut into corporate profit
margins.
The article pertained a lot to class discussion, as we have
just discussed the reasons for unemployment.
http://www.nytimes.com/2016/02/06/business/economy/jobs-report-unemployment-january-fed-interest-rates.html?ref=economy
Although this opinion states that the economy is safe even with the current international concerns I am not sure it is correct. I will admit that growth domestically is promising and shows that we are not sliding to recession at the moment. I would note however the poor international conditions may still hurt America in the near future. With how intertwined international economies are today, it may be possible that the conditions in places such as China have not hit us fully yet. Although the economy is performing well now I believe that we must remain cautious and keep a close eye on the effect diminishing growth in other nations may have on America.
ReplyDeleteI agree that the low unemployment rate displays the strength and stability of the US market currently. However, the fact that there is a "tight" labor market could have pros and cons for the country. For example, since there is a tight labor market this means that there are few individuals without a job if they are searching for one. However, on the other hand, a tight labor market also means that employers will have to raise salaries of workers in order to incentivize new workers to take the job. When the firms raise the salaries, this can sometimes lead to unemployment and lay offs since the companies' costs of employing individuals increases and workers are still paid for their productivity levels. Additionally, I think we need to be skeptical about the stability of the economy abroad; especially considering the struggling market in China and the strength of the dollar which impacts American exports.
ReplyDeleteI agree that the low unemployment rate displays the strength and stability of the US market currently. However, the fact that there is a "tight" labor market could have pros and cons for the country. For example, since there is a tight labor market this means that there are few individuals without a job if they are searching for one. However, on the other hand, a tight labor market also means that employers will have to raise salaries of workers in order to incentivize new workers to take the job. When the firms raise the salaries, this can sometimes lead to unemployment and lay offs since the companies' costs of employing individuals increases and workers are still paid for their productivity levels. Additionally, I think we need to be skeptical about the stability of the economy abroad; especially considering the struggling market in China and the strength of the dollar which impacts American exports.
ReplyDeleteI agree that the low unemployment rate displays the strength and stability of the US market currently. However, the fact that there is a "tight" labor market could have pros and cons for the country. For example, since there is a tight labor market this means that there are few individuals without a job if they are searching for one. However, on the other hand, a tight labor market also means that employers will have to raise salaries of workers in order to incentivize new workers to take the job. When the firms raise the salaries, this can sometimes lead to unemployment and lay offs since the companies' costs of employing individuals increases and workers are still paid for their productivity levels. Additionally, I think we need to be skeptical about the stability of the economy abroad; especially considering the struggling market in China and the strength of the dollar which impacts American exports.
ReplyDeleteI would agree with Hilary that the tight labor market might force employers to raise their workers wages which could limit the number of workers they hire and lead to more lay offs and unemployment. I would also look at the effect of raising wages for workers as this could in turn increase prices and also have an effect on the economy.
ReplyDeleteWill highlights the most important note. With each day that passes, the world becomes more and more globally linked in polotics, and now more than ever, economics. In the 20th century, the U.S was the biggest mover and shaker of markets around the world. Now, a drop in the EU's markets, China's, and even Brazil's or other nations creates ripples in foreign markets. Domestically, the U.S has stabalized itself, which is a good sign for us and other countries, but does not make us prepared for a crash in another market. Informed citizens should look not only at the US GDP, but markets around the world to garner a better understanding of our economies current state.
ReplyDelete