Unemployment Data Offers New Hope
The first week of the New Year closed with nonfarm payroll at 200,000, with expectations at 155,000. Meanwhile, the unemployment rate is at 8.5 percent, the lowest since February 2009.
According to Zerohedge, the unemployment numbers are down from an upward revised 8.7%. U-6 15.2% down from 15.6% in November.
The article states that, “Average hourly earnings rose at 0.2%, in line with expectations, previous revised to -0.1% from unchanged. Private payrolls +212L vs Expectations of 178K. Manufacturing payrolls rose 23K vs Expectations of 155K. Yet the unemployment rate trickery still continues, with labor force participation (prior revised), now at a 27 year low of 64%, and the labor force itself declined by 50K from 153,937 to 153,887.”
Reuters reported that the data offered the strongest evidence yet of an acceleration in economic activity.
“The economy needs to sustain the current pace of job creation to signal a robust recovery is finally under way,” said writer Lucia Mutikani. “Signs the labor market is gaining traction could offer some comfort for the Obama administration, whose economic policies are constantly attacked by the Republicans.”
Of course, she is right too. As we enter this election year, the President and his administration will be looking to campaign on any positive figures that they can dig up.
"This highlights that the U.S. economy is on its way to recovery even as strains in Europe persist," said David Watt, senior currency strategist at RBC Capital in Toronto, to Reuters.
Mutikani continues by saying that, “Still, the economy needs even faster pace of job growth over a sustained period to make a noticeable dent in the pool of the 23.7 million Americans who remain either out of work or underemployed since the end of the 2007-09 recession. With the labor market still far from healthy, the debt crisis in Europe unresolved and tensions over Iran threatening to drive up oil prices, the U.S. economy faces stiff headwinds. Economists predict the recovery will lose a step early this year after expanding in the fourth quarter at what is expected to be the fastest pace in 1-1/2 years. This should keep alive the possibility of the Federal Reserve embarking on a third round of asset purchases, or quantitative easing, to spur stronger growth.”
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