The U.S. economy
generates the number of jobs last month which is the fastest pace since February, a sign is strong
enough to pull out of a midyear slump & grow modestly even as the rest of
the world slows down.
The 163,000 jobs employees
added in July ended with three months of hiring. But the surprising gains
weren't enough to reduce the unemployment rate which moved
up from 8.2 to 8.3 percent at
May to June, the 42nd straight month the jobless rate has exceeded more
than 8 percent. The United States remains immoveable with the weakest economic
recovery since World War II.
The latest number of jobs,
released Friday by the Labor Department, provided fodder both for President
Barack Obama, who highlighted improved hiring in the private sector, &
Republican challenger Mitt Romney, who pointed toward higher unemployment.
According to chief economist Scott Brown at the
investment firm, Raymond James said, “It’s not especially weak, but it's not
especially strong situation.”Investors now focused on the positive. And the Dow
Jones industrial surged to 217 points.
Three more monthly jobs
reports will be published before Election Day, including the one for October on
Friday, November 2, just four days before Americans vote.
No modern president has faced re-election when unemployment rate
more than 8 percent since the Second World War. President Jimmy Carter was
bounced from his office in November 1980 when unemployment rate was not more
than 7.5 percent.
In remarks of the White House, Obama said the private sector
has added 4.5 million jobs in last 29 months. He also said, “There are still
too many people who are out of work. We've got more work to do on their
behalf.”
Romney focused on the increase in the unemployment rate, as same as did
other Republicans. He said in a statement, "Middle-class Americans deserve
better development, and I believe America can do it better.”
The U.S. economy is still
struggling more than three years after the Great Recession which officially
ended in June 2009. Then the collapse of the housing market & the financial
crisis that followed froze credit, which destroyed trillions of dollars in
household wealth and brought home construction to a termination. Consumer
spending, which accounts for 70 percent of economic output as well, remains
weak as Americans pay down debts and save more.
From April to June this
year, the economy expanded 1.5 percent of its annual pace, where January-March its
pace was 2 percent.
From the beginning of 2012 the job market was
strong & employers added on an average 226,000 a month from January through
March.
The payback showed up as
weak hiring on an average 73,000 a month from April through June. The reason
was that an unseasonably warm winter that allowed construction companies and
other firms to hire earlier in the year than usual, effectively they stealing
jobs from the spring.
The warm weather effects have worn off now, economists now expect job
growth to settle the range of 100,000 to 150,000 a month at least. Then came
the 163,000 new jobs in July, beating the concept of 100,000 economists had
expected.
The economy has to add on an average of 151,000 jobs a month this year. But
that hasn't been enough to bring unemployment down. In July the unemployment
was high as 8.3% as the month of January.
The unemployment rate can rise even when Employer cuts
down jobs. The government decides the figures from two different
surveys.
One is called the "payroll survey". It asks mostly large
companies & government agencies how many people they employed during the
month. This survey gives a clear knowledge about the number of jobs gained or
lost.
The other is the "household survey". Government workers collect the information about
their family either adult in a household have a job and use the findings to
produce the unemployment rate as well. Last month's small increase in
joblessness was practically a rounding error: The unemployment rate increased
up from 8.22 percent in June to 8.25 in July.
Most of the Economists have
stated that the U.S. economy will fall off a "fiscal cliff" at the
end of the year when more than $600 billion in tax increases and spending cuts
will kick in unless Congress reaches a budget deal.
The "draconian dose of austerity" is meant to force Republicans & Democrats to compromise, if they can't
do that taxes go up and spending gets slashed, the economy will move to
recession, contracting with an annual rate of 1.3% in the first six months of
2013, according to the Congressional Budget Office respondent.
The rest of the world is moving
slowly. Much of Europe is in recession as policymakers are struggling to deal with high government debts, weak
banks and the threat that countries will abandon the euro currency and destroy
the region's financial system.
Mario Draghi - the President of
European Central Bank said on Thursday that the bank is preparing to buy
government bonds to help slow down borrowing costs in debt-ridden countries
like Spain & Italy.
The high-powered economies
countries like China, India and Brazil are also slowing & sharply moving because
of Europe's troubles have hurt their exports.
According to chief
economist at Markit in London, Chris Williamson said, If the previous three
months of dull job creation were not enough to impulse the Fed into acting more
aggressively, then Friday's numbers "must surely kill off the all possibility
of coming up action.”
The job market still has a
long way to go for betterment. The economy lost 8.8 million jobs from January
2008 until it hit bottom in February 2010. Since then, only 4 million, or 46
percent, have been employed.
Americans who were either
unemployed, working part-time jobs because they couldn't find full-time work or
too discouraged to look for work rose from 14.9 to 15 percent in June. Nearly about
5.2 million Americans have been out of work for six months or more.
An Example: Eric Kosmack
has applied for 450 jobs since he graduated in January 2011 from Montclair
State University in New Jersey. Because of his concentration in accounting, he
is looking for a job in accounting but he had to do such kind of job whose
concentration in mathematics to do the job much better. He has had three
temporary jobs since 2011, including one that ended last Tuesday, but no luck
in his search for a permanent job.
And most of the jobs described
as "entry level" with one to three years of experience, which he
doesn't have so far. "I understand that they want to find the perfect
candidate for their company, but it seems take a long process," he said.
Over the last year, wages
have increased only 1.7 percent just matching the rate of inflation. Government
mostly tries to cutback continued to balance on the job market. The economy
lost about 9,000 government jobs in June and 660,000 over the last two years.
In fact, private payrolls
are higher now than January 2009 when Obama took his office.
In this July, private job sector added 25,000 manufacturing jobs, the most ever since March.
Restaurants & bars added more than 29, 000 jobs. Temporary help services
added 14,100 jobs as well. Retailers hired 7,000 more workers for their
requirement. Education and health services gained 38,000 jobs as more than
before.
Another Example: an owner
of the Little Wine Bus in New York, Tania Dougherty has two tour guides and
wants to hire at least three more people because more companies are booking her
daylong winery tours for employee daily visit.
After the financial crisis
in 2008, companies had to cut back on bonuses, Dougherty said. But now employers
are recognizing that they need to spend more money on their workers to retain
them as many as they can, she said.
People can work long hours
& you have to reward employees. And they deserve the day out, and companies
have to give chance of their opportunities.
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