Job Rates Grow

Sources: AFP, Washington Post

In the midst of all the bad news of a weakening US dollar, a housing glut, and credit woes, the new job report provided much needed good news for the American economy. Employers added nearly 166,000 new jobs in October, nearly double the projected 80,000. Unemployment, however, remained firm at 4.7% nationally. As expected though, jobs tied to the credit and housing markets saw some contraction. Residential construction and contracting jobs fell by 21,500, and the manufacturing sector lost 21,000 jobs. Nevertheless, the health care sector added 34,400 jobs, employment services firms added 33,500, public schools added 34,600, and the professional sector added 23,500 jobs. More than just jobs—salaries and wages are increasing. Non-supervisory wages has risen 3.8 percent over the past year, to $17.58/hour. Nevertheless, some bad news is still around. Unemployment has remained steady, but a lower proportion of the working-age population is employed today.

Analysts remain somewhat concerned, however, that job growth will eventually slow down. Nevertheless, the stronger the expected job growth and a 3.9 percent economic growth demonstrates that the slowdown has not yet occurred. Economic experts consider the labor market an “even more important economic forecaster than usual” in light of the credit and housing crunch. As Americans lose wealth through their homes, they will keep spending money “if businesses keep expanding and hiring. Consumer spending is the economy’s main driver.” In other words, there can be no recession if there are jobs.

Questions: Can the job rates continue to grow--even though housing prices and wealth is dropping through the floor?