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| US employment outlook brightens | |
| 2007-10-05 | |
| The US created more jobs last month than expected while revised figures showed the labour market was stronger in August than first thought. The US Labor Department said the economy added 110,000 new jobs in September, higher than the 100,000 figure predicted by economists. And rather than shedding 4,000 jobs in August as initially estimated, 89,000 new jobs were actually created. Jobs data is seen as a key indicator of the health of the US economy. US shares rose on news of the better-than-expected figures but economists pointed out the overall unemployment rate had risen to 4.7% from 4.6%, the highest for a year. Had August's initial estimate been confirmed it would have suggested a sharp slowdown in the economy since the economy has not shed jobs on a monthly basis for four years.
Concerns about the strength of the labour market was one of the factors behind the Federal Reserve's decision to cut interest rates by a half point last month. The dramatic move followed the turbulence in global financial markets triggered by the slump in the US housing market. The rise in August's jobs figure was largely due to the previous underestimation of government hiring, particularly of new teachers. While September saw a rise in recruitment in the services sector, there was a net loss in jobs in construction and manufacturing industries. "On balance, it was quite encouraging," said Michael Metz, chief investment strategist at Oppenheimer & Co. "However, looking at it on a sixth-month basis we still have a problem with very, very slow job creation. To me it does not signal any great strength in the economy." In reality, the US economy has to create about 100,000 jobs a month to replace those lost through retirement and natural attrition. | |
| Posted by:lotp |
| #2 Iknew the August numbers had to be wrong. Whenever the "actual" numbers are wildly different than forecast, go with the forecast. Al |
| Posted by: Frozen Al 2007-10-05 12:54 |
| #1 I'm sure this will get wide coverage in the U.S. press... |
| Posted by: Raj 2007-10-05 12:40 |