Sunday, November 10, 2013

October jobs report far better than expected

Both consumer spending and business investment growth slowed in the third quarter.Measures of retail activity in October have largely exceeded expectations, and holiday sales and hiring are projected to rise above last year's levels.Yet Main Street isn't enjoying the party on Wall Street, where the Dow Jones industrial average soared to a new high Friday. Consumer confidence, as tracked by the University of Michigan and Thomson Reuters,alligator shear fell this month to its lowest level in nearly two years, the survey group said Friday.And while housing prices are recovering, many workers have yet to see substantial wage gains. The Labor Department report Friday said average hourly earnings rose just 2 cents last month, to $24.10, after increasing by 3 cents in September.

Analysts pointed out that the economy, after nearly 4 1/2 years of recovery, still needs to create 1.5 million jobs to make up the 8.7 million that were lost between late 2007 and early 2010.The number of unemployed last month stood at more than 11 million,alligator shear and that doesn't include many who had dropped out of the job market because they could not find adequate work or were too discouraged. Nearly 4 out of 10 of the officially unemployed have been without work for more than six months — double the percentage before the recession.At the October pace of job creation, "it will still take five years to get back to the pre-recession unemployment rate of 5%," said labor economist Heidi Shierholz at the Economic Policy Institute in Washington.

Still, Shierholz was pleasantly surprised by the strength of Friday's report, saying the underlying trend of job growth now looks more like 200,000 a month than 150,000 a month."It's not gangbusters, but it's better," she said.Whether the job numbers are good enough for the Fed remains to be seen. Policymakers at the central bank are scheduled to meet Dec. 17-18, so they will have one more monthly jobs report to review before skin analyzer considering a reduction in their $85-billion-a-month purchases of Treasury and mortgage securities — a stimulus program aimed at holding down long-term interest rates.

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