In spite of recent fears about stagnant or even weaker economy, March has presented a steady growth in U.S. jobs, making promises of raising interest rates in the Federal Reserve this year.
A Reuters economy survey showed that February brought 295,000 nonfarm payrolls, while March probably added more 245,000. With March marking the 13th consecutive month of job growth above 200,000, we are witnessing the longest streak in the U.S. economy since late 1993.
The labor market had to fight unfavorable conditions for it to prosper, such as a difficult winter season, a resilient dollar and a decreasing global demand – a mix that affected our economic activity in the year’s first quarter.
Even though growth has significantly slowed during the last three month, the deceleration is predicted to be short-lived. Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania, said that the quick recovery will prove economy was temporarily slowed due to weather-reasons, and not because it is fundamentally faulty.
The monthly report on employment rates released by the Labor Department will be made public at 8:30 a.m. (1230 GMT) on Friday. Even though a lot of overseas stock markets will not open their doors due to the Good Friday holiday, the U.S. bond markets decided to be open for just a few hours, setting a positive tone with the jobs report.
Predictions for the unemployment rate are indeed good news, as we approach the area considered to match the terms of full employment, according to some Fed officials. Even though the employment growth might not meet the forecast due to a sharp break in private hiring in March, any figure above 200,000 will be considered to have a positive impact on the economy.
According to Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania, we should be expecting some more moderate numbers after so many months when job growth has been booming.
In order for the American economy to be in balance with the employment rate, we need around 100,000/120,000 new jobs each month – absorbing the market slack and matching the rate of population growth.
With Wal-Mart and McDonald’s, two of U.S.’ most influent chain companies, announcing pay raises in the next months, analysts expect that wage growth might gain traction in the months to come. Other wage increases are in the making from companies such as TJX Cos Inc and health insurer Aetna.
Image Source: Wright Executive
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