U.S. Unemployment Drops, Job Market Grows
A government report, released last Thursday, boasted a 3 ½ year low for new U.S. unemployment claims, surpassing economist’s and analysts’ expectations according to reuters.com. New claims for state funded unemployment benefits dropped by 19,000 to a total of 366,000; far below the analysts’ predictions of 390,000. The Labor Department also posted an increase in hiring and job creation for the past four months. In November alone, Non- farm payrolls increased 120,000 and the manufacturing sector, arguably the hardest hit by the recession, showed an additional 2000 employees on the payroll.
But the outlook remains cautiously optimistic; the drop in unemployment claims simply brings the US closer to the 350,000 mark indicative of a strong labor market and while jobs are being added overall, some sectors still suffer- government employment dropped by 20,000 last month, similarly construction payrolls fell by 12000 and 15000 jobs were lost. Not to mention, holiday spending forecasts that indicate growth but warn of dipping profit margins from deep, possibly too deep, discounts, a global economic slowdown coupled with the impending recession in the euro zone and the threat of 2012 federal spending cuts that could affect payroll tax cuts and unemployment benefits.
Paul Ballew, the chief economist at Nationwide Insurance said; “The recovery is picking up some momentum. We still have a very long way to go, but this is very consistent with a recovery that has shown a little bit more resilience in the second half of the year.” And Ryan Sweet, of Moody’s Analystics echoes the same sentiment, “We still have a long way to go.”