After 2008 financial crisis US has been engaged in
increasing the rate of employment ever since. Reducing the unemployment rate is
tough to achieve. However in October 2017 there was an increase in the employment
level of 261,000 jobs in US. A solid gain that nevertheless fell short of
expectation. As per BBC the wage grow
was slower however the number of people that were not in the labor force rose.
Which lead to unemployment rate to 4.1% in 2017 October which is the lowest
rate in the US since 2000. The US Department of labor claimed that the
employment in the food and drink industries increased sharply. One of the
economist said that older speed of hiring would be difficult to maintain, because
the supply of unemployed worker fell. However US departments are confused
because the wage growth did rise significantly despite the employers pay more
to the recited workers. As per the department of labor US average hourly pay
for private sector was $26.53. Earnings increased by only 2.4% year by
year. Though the results were less than
the forecast Mr. Wilson claimed that the results will not change the
expectation that the US FED will increase the interest rate in December.
Retrieved from:
http://www.bbc.com/news/business-41856443
The unemployment rate at the beginning of this year was 4.8% and in September it was 4.2%. So there is no doubt that employment has risen, but it seems the problem is that wages are not following. In the article it was stated that it could be because of the hurricanes and that in the months to come things could be very different. I will be following this closely in research paper for Econometrics.
ReplyDeleteThe United States economy is in a unique time in which we are deep into the recovery period of the business cycle. Alan Greenspan once talked about how the Federal Reserve is constantly trying to maintain a balancing act between limiting inflation and keeping Americans employed. They try to stretch the recovery period out for as long as possible while making the recessions short. There is a common belief that the lower the unemployment rate goes, the higher inflation will be but we have yet to see signs of inflation (the Federal Reserve is attempting to combat that with rates increases slowly). It is almost too late in the recovery for the economy to see another stimulus without becoming overheated however another recession doesn't appear immediately on the horizon.
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