Positive June US Employment Growth Rate Spurs Forecasts of Economic Recovery in 2014
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The month of June brought some good news from the U.S. Bureau of Labor Statistics. The most recent data on the matter, published under the title THE EMPLOYMENT SITUATION — JUNE 2014, states there were 288,000 new paid jobs last month in the United States. Unemployment declined by .2 percent in June. This figure is down to 6.1 percent which indicates a positive June US employment growth rate. This total decreased to 1.4 percent for 2014, with women and African Americans as the two demographics that have experienced the biggest improvement in these last months. The number of long-term unemployed individuals also decreased in June by 293,000. This figure is now down to 3.1 million. Overall, massive job growth occurred across the U.S. This growth is an indicator of an US economic recovery in 2014 according to the most optimistic of analysts. These positive predictions are based on the fact that 2014 saw the most rapidly accelerating pace of job growth of all the post-recession years. Major global press agency Reuters, for instance, notes that the jobless rate in June 2014 was the lowest recorded in six years. Reuters continued on to declare this as “decisive evidence” that the economy is “growing briskly heading into the second half of the year”.
US job growth was widespread across several major sectors of the economy in June. Leading the way were professional and business services, retail trade, food services/drinking places, as well as the rather permanent fixture of growth, health care. For instance, the increase in the services sector amounted to 236,000 new jobs. This surge is the biggest jump in new jobs since October 2012. More good news came from those already employed or seeking employment from the manufacturing industry where there were 16,000 new jobs created. The manufacturing sector has been growing for the past 11 months straight. Construction employment has constantly improved as well with six consecutive months of employment increases. In the government sector, the month of June brought about 26,000 new jobs.
Analysts examining these growth rates consider the current situation very positive. Not only is the unemployment rate standing at a much lower 6.1 percent (which is the lowest recorded level since September 2008), but the rate of people who have stopped looking for employment or are working part-time, also dropped to 12.1 percent. Again, this is the lowest recorded ratio since October 2008. There are some less positive reports, too: underemployment increased in June 2014, by 275,000 (which is up to 7.5 million). The number of part-time jobs for noneconomic reasons went up by 840,000, to 19.5 million. The rate of work force participation is still the lowest on record for the past 36 years. This number stands at 62.8 percent and hasn’t flinched in three months straight.
However, by and large, the data that came in from the U.S. Bureau of Labor Statistics is still better than what the analysts predicted. The forecasted number of new jobs stood at 215,000 for June. Analysts expected the unemployment rate to stagnate around 6.3 percent. Given the positive readings, it’s only normal that several economists expressed positive expectations regarding a full recovery of the U.S. economy.
Experts expect many markets to react positively to this host of good news. Although the initial signs were not that spectacular. Wall Street opened on a mildly positive note while interest rates skyrocketed. As the year progresses, many expect to see the debate on monetary policies from the U.S. central bank reopen. There has been intense speculation regarding a rate raise from the Federal Reserve. This rate raise might just come sooner than the initially expected middle of 2015. Wall Street analysts are optimistic about economic growth for the year’s second term. And, the improvement of the job market is fueling their forecasts.