Drop in US job­less rate raises ques­tion

Kuwait Times - - BUSINESS -

A drop in the un­em­ploy­ment rate to a 16-year low raises a tan­ta­liz­ing ques­tion about the job mar­ket: How much bet­ter can it get? Ear­lier this year, econ­o­mists wor­ried that the low un­em­ploy­ment rate meant busi­nesses would strug­gle to find work­ers and that would drag down the pace of hir­ing. Those fears were height­ened by a tiny job gain in March and mod­est hir­ing in May.

Yet Fri­day’s jobs re­port sug­gests such con­cerns are pre­ma­ture. Em­ploy­ers added 209,000 jobs, af­ter a solid gain of 231,000 in June, the Labor Depart­ment said. The un­em­ploy­ment rate ticked down to 4.3 per­cent, from 4.4 per­cent, match­ing the low reached in May. The US econ­omy is ben­e­fit­ing from steady growth around the world, with Europe and Ja­pan perk­ing up and China’s econ­omy sta­bi­liz­ing. Cor­po­rate rev­enue and profits are grow­ing too, and the stock mar­ket has hit record highs.

Econ­o­mists were par­tic­u­larly en­cour­aged by the fact that more Amer­i­cans are com­ing off the side­lines and find­ing jobs. For the first few years af­ter the re­ces­sion, many of the un­em­ployed stopped look­ing for work. Some were dis­cour­aged by the lack of avail­able jobs. Oth­ers re­turned to school or stayed home to take care of fam­ily. The gov­ern­ment doesn’t count those out of work as un­em­ployed un­less they are ac­tively search­ing for jobs.

That trend be­gan to re­verse last year and has con­tin­ued into 2017. To many econ­o­mists, that means ro­bust hir­ing could con­tinue for many more months, or even years. “There’s more peo­ple will­ing to work than the un­em­ploy­ment rate would have you be­lieve,” said Nick Bunker, a se­nior pol­icy an­a­lyst at the Wash­ing­ton Cen­ter for Eq­ui­table Growth, a lib­eral think tank.

Pres­i­dent Don­ald Trump cel­e­brated the data in a tweet shortly af­ter the num­bers were re­leased. “Ex­cel­lent Jobs Num­bers,” he wrote, “and I have only just be­gun.”

Trump tech­ni­cally tweeted too early: His com­ment was posted at 8:45 am, just 15 min­utes af­ter the re­port was re­leased. Fed­eral rules spec­ify that White House of­fi­cials should wait for an hour be­fore pub­licly com­ment­ing. The rule is in­tended to al­low the data to be re­leased with­out po­lit­i­cal spin.

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