Posted on Wednesday, 9th December 2009 by admin
We’ve grown accustomed to bad news in the US over the past couple of years. Media outlets have been accused of celebrating that bad news, highlighting it in an effort to continue the ratings bonanza that started with people glued to cable news stations as the economy was falling apart. Over the past few months a little bit of good news has started to creep in, mostly around the stabilization of the financial markets and of the housing market. The job market has continued to be a source of consistently bad news, something that changed with the newly released November numbers.
November’s job losses were the mildest since the recession began two years ago. In all, 11,000 jobs were lost during the month in spite of economists expecting 125,000 net jobs lost. In addition, the number of job losses recorded for September and October were both revised to lower numbers than previously reported. Unemployment is a lagging indicator of the health of the economy and the fact that we’re starting to see good news from employment reports is a great sign for the prospects of an economic recovery. Here are some of the positive highlights from the jobs report.
The Unemployment Rate Declined: As a result of the revisions to the job loss numbers for the past two months, the unemployment rate declined to 10 percent, down from a rate of 10.2 percent last month. Leading into this month, the consensus opinion among economists was that the unemployment rate would remain between 10 and 11 percent until at least the middle of 2010. There is now a reason for a little more optimism, although many are cautioning that the unemployment rate will probably increase again for the next couple of months.
Hours per Worker Increased: This number doesn’t make nearly as many headlines as the unemployment rate, but the number of hours worked each week by the average employed worker increased from 33.0 to 33.2 in November. This is important because most small businesses that do the bulk of hiring in the U.S. are expected to increase the work opportunities for current employees before hiring new employees. Millions of workers have seen their hours and wages cut during the recession, but more hours worked means more money in the pockets of employed Americans, a sign that will eventually lead to stronger consumer spending.
President Obama Unveiled a Job Creation Plan: In conjunction with the jobs report, President Obama announced that next week he will send Congress an outline of the next phase in his job creation plan. He is expected to endorse cash incentives for people that make energy saving improvements to their homes and tax benefits for small businesses that hire employees. He is also expected to announce increased spending for construction projects for roads, bridges, and other essential infrastructure projects.
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