About unemployment

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According to Cox (2017), the US unemployment rate dropped to 4.1 percent in October as working markets improved after a stormy September. In October, the US economy gained 261,000 jobs, much more than in September 2017, when just 18,000 jobs were added. Nonetheless, the number of jobs generated in October was smaller than the 310,000 predicted by Wall Street (Cox, 2017). The hospitality industry, which provided around 89,000 jobs as a result of the September floods, was one of the sectors that saw a higher number of job creations. 50,000 jobs were generated in the corporate services and technical industries. manufacturing industry added 24,000 while the health sector added 22,000 employment opportunities. Cox, (2017) adds that the unemployment rate fell in October because the number of jobless people who worked part-time or clustered as “discouraged workers” also fell by 7.9% and 8.3% irrespectively. Experts claim that the US economy has a positive growth indication which is characterized by economic growth in the payroll margins in the recent months and years.

Analysis

From the article, it is evident that the US economy is gradually growing as more jobs are created across various sectors in the recent month. The growth has come as a shock to many following political environments, and natural storms, which in one way or the other have affected the US economy in 2017. However, as things stabilize, more jobs are being created, and the rate of unemployment is falling significantly. For instance, stabilization after the September storms has led to massive employment in the hospitality sector, and this has attributed to a decline in the rate of unemployment.

More so, the steady economic growth in October has been attributed to increased growth in the manufacturing sector, one of the areas President Trump emphasized in his economic agenda. It is imperative to note that like other economies that have limited white-collar jobs, US is no exception. Hence, to address the issue of the ever-increasing unemployment, President Trump has put more emphasis in creating blue-collar jobs, which has created about 156,000 jobs in the last one year. The drop in the rate of unemployment has been attributed to the growth of domestic product by 3% in the third quarter of the year, which has led to the creation of jobs in US companies. The rate of unemployment is likely to drop further when the Federal Reserve raise the benchmark rate in the fourth quarter, hence, by the end of the year, more jobs are expected to be added. Nonetheless, Lack of inflation in hourly earnings is one of the areas that stand as a stumbling block to the growth of nonfarm payrolls, and this might hinder more job creation.

Recommendations

The US economy often relies on traditional model jobs such as manufacturing and hospitality and fails to optimize new avenues such as the online platform to create more self-employed jobs. Diversifying of job creation to include traditional and contemporary employment will add more jobs and record a high GDP. Consequently, the government should strive to increase the minimum wage to $10.10 hour to encourage even the educated people to take ordinary jobs to reduce the rate of unemployment, which is affecting almost every household. A hike in the minimum wage will boost consumer consumption, which will promote the growth of domestic products. Besides, the US government can create more employment by investing in Small and Medium Enterprises, which accounts for 60% of jobs in most OECD. Consequently, through creating better economic conditions, the government can help young graduates actualize their ideas and create employment for hundreds of Americans.

Reference

Cox, J. (2017, 3 Nov).US created 261,000 jobs in Oct, vs. 310,000 jobs expected. Retrieved on 15th November from CNBC: https://www.cnbc.com/2017/11/03/us-nonfarm-payrolls-oct-2017.html

Article

US created 261,000 jobs in Oct, vs 310,000 jobs expected

The U.S. economy added 261,000 jobs in October, the Bureau of Labor Statistics reports.

The unemployment rate fell to 4.1 percent as labor conditions returned to normal following the storm-weakened September, it says.

Jeff Cox | @JeffCoxCNBCcom

Published 8:30 AM ET Fri, 3 Nov 2017 Updated 10:14 AM ET Fri, 3 Nov 2017 CNBC.com

U.S. economy adds 261,000 jobs in October 8:42 AM ET Fri, 3 Nov 2017 | 01:39

The U.S. economy added 261,000 jobs in October and the unemployment rate was 4.1 percent as labor conditions returned to normal following the storm-weakened September.

However, the jobs-creation number was considerably below Wall Street expectations of 310,000. The tick lower in the unemployment rate came against expectations it would hold at 4.2 percent.

A broader measure of joblessness that includes discouraged workers and those at work part -time for economic reasons fell sharply, from 8.3 percent to 7.9 percent after being at 9.5 percent just a year ago.

In addition to the October growth, an initially reported decline of 33,000 for September was revised up to a gain of 18,000. August's count also was revised up from 169,000 to 208,000.

"Today's report, albeit a little bit mixed, is still a relatively decent number. It still points towards the positive trend that we've seen in payroll growth over the last several months and the last couple of years actually," said Tony Bedikian, head of global markets at Citizens Bank. "In general, the economy is moving along, though a little softer than many market participants anticipated."

The report comes as the Federal Reserve is expected to hike its benchmark rate another quarter point in December. However, the central bank has been wary over the lack of inflation, particularly in the average hourly earnings component of the nonfarm payrolls count.

Wage growth again disappointed, with earnings actually off by 1 cent an hour and showing just a 2.4 percent annualized gain.

Indeed, the biggest gain in employment came from the hospitality industry, with jobs at food and drinking establishments up by 89,000, reflecting a storm-related rebound. Professional and business services contributed 50,000 to the total while manufacturing added 24,000 and health care increased by 22,000.

"Despite coming in below expectations, this is the type of report the Fed was looking for to sign, seal, and deliver a rate hike in December," said Mike Loewengart, vice president of investment strategy at E-Trade Financial.

In all, employment in the manufacturing sector has increased by 156,000 since President Donald Trump's election in November 2016. Trump has made blue-collar growth a priority of his economic agenda.

The household survey, which canvasses homes and asks how many people are at work, provided less encouraging data. It showed the total employment level falling by 484,000 in October after surging by nearly a million in September. Those counted as not in the labor force also surged by 968,000, to 95.4 million.

Though falling short of hopes, the Bureau of Labor Statistics report coincides with other data indicating economic momentum. Gross domestic product grew by 3 percent in the third quarter, according to the government's first estimate, and CNBC's tracker shows the fourth quarter on pace to rise 2.8 percent.

Stock market futures initially nudged higher following the report while government bond yields edged lower. Stocks were mixed by midmorning.

November 17, 2022
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