U.S. Employment Numbers Mixed as Economy Treads Water
Tue, Sep 7, 11:41 AM ET, by ForexTraders.com
United States' employment numbers offered a mixed picture last week, beginning with the ADP Non Farm Employment Change release out last Wednesday. That closely watched employment number showed a job loss of -10K that was significantly below the anticipated expected job gain of +20K. To make matters even worse, the preceding number was revised down to 37K from 42K. Last Thursday then saw the release of U.S. Initial Jobless Claims that came out at 472K - a level that was only slightly lower than the market consensus of 476K. On Friday, the Bureau of Labor Statistics put out the U.S. Unemployment Rate that showed the percent of jobless in the U.S. economy had held steady at 9.6 percent, or 14.9 million people. At the same time, the Labor Bureau also released its key Non Farm Payrolls number that showed a decline of -54,000 jobs in August. This result was a considerable improvement over the substantially larger -101K loss that had been anticipated. In addition, the former number was revised substantially upward from the -131K level to -54K. Furthermore, the NFP number's breakdown showed that while the private sector added 67,000 new jobs, U.S. Government employment decreased by 121,000 jobs that reflected the departure of 114,000 census takers from the workforce. Forex Market Reacts Negatively to Mixed Employment NumbersThe U.S. Dollar fell sharply on Wednesday's release of the poorer than expected ADP Non Farm Payrolls number, but then failed to recover all of that territory when Friday's official Non Farm Payrolls number came out better than expected. Furthermore, despite that second set of seemingly positive August job numbers, job growth has weakened in recent months in the United States and will probably impede the Unemployment Rate from going down much further in the near term at least. According to some estimates, the U.S. economy would need to add 200,000 jobs a month to rehire idle Americans made unemployed by the recent recession and to keep up with population growth. Given these conditions, the Unemployment Rate may be above 9 percent well into 2011, and this may prompt unrest that could also affect the outcome of the United States mid-term elections this coming November. Obama Comments on the Employment NumbersWhile the employment numbers seem to have stopped getting worse, improvement in the numbers seems mixed to marginal, at best. For his part, U.S. President Obama stated that he was pleased with the positive numbers and noted that: "The economy is moving in a positive direction," and that "Jobs are being created. They are just not being created as fast as they need to, given the big hole that we have experienced." President Obama also went on to say that: "We are going to have to continue to work with both Republicans and Democrats to come up with ideas that can further accelerate that job growth," and that "I am confident that we can do that." Despite Obama's apparent "Yes we can!" confidence, unless employment increases substantially in the United States, the fact remains that prospects for a sustained U.S. economic recovery become ever more elusive.
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