US unemployment rate sinks bring cheer to the Economy
The job growth has risen in the US in January as many employers have started to hire workers across 11 months thereby pointing to a fundamental consolidation of the US economy although the outlook for the year is quite gloomy and uncertain. The developing facts have perplexed the Federal Reserve while considering to raise interest rates this year. The monthly rate of employment is closely being watched by the Labour Department and has stated it has not seen any significant impact on job growth due to the partial shutdown of the US government. Even there was no significant impact recorded in the private industry.
The 35-day governmental shutdown which was the longest in history and had ended last week had kicked the unemployment to 4 percent which is highest recorded in the last seven months. This figure had come after a couple of days when the Fed gave signals of bringing an end to the three-year interest rate hike campaign as the economy was facing strong headwinds. The latter was in addition to the volatility seen in the financial market and weakening global growth. The pace at which people are hired now point towards a growing momentum which has been set up in the economy, a fact which has been reinforced by some experts.
The largest gains had been recorded in the non-farm payrolls last month ever since February last year. 304,000 jobs have been recorded in the first month of the year as hiring continued to grow at construction sites, retailers, restaurants, amusement parks, hotels, etc. As many as 70,000 fewer jobs have been reported as compared to last November and December. As per many economists give the forecasts, only 165,000 jobs would have been added to payrolls in January which means that nearly 100,000 jobs are needed every month to keep pace with the growth of the working-age population. This January has made a record of 100 direct months of job gains.
The economy did suffer due to the extended shutdown of the government, as many workers were furloughed. But, President Donald Trump has assured back pay to them by signed a law which guarantees the same. It was because of this; these workers were also included in the survey of employers from which the number of payrolls was calculated. These workers were then put in the category of ‘temporary layoff’ and not as unemployed by a different survey of households from which the jobless rate is calculated. It was this shift which had increased the unemployment rate one-tenth of a percentage point from 3.9 percent. The shutdown was actually dissolved as the Congress released money for temporary funding of the government and not sparing any amount for Trump’s border wall along the Mexican border in order to check illegal immigrants from entering the mainland US.