Friday, December 3, 2010
Employment growing less than expected
After so many of the things the government has done to stimulate the economy and regain job growth. Many economists expected this report to come back with unemployment lower, although it actually rose to 9.8% Employers are reluctant to hire new workers, especially full-time because of the uncertainty in tax rates, health care costs (benefits), and new governmental regulations.
Subscribe to:
Post Comments (Atom)
4 comments:
This low employment growth didn't come as a surprise. With the U.S economy expanding very little in the past quarters, firms are definitely still hesitant to hire new workers. I think the unemployment rate will be persistently high until at least the middle of next year as the policies in creating jobs start having some effect (hopefully).
Personally, I think the unemployment rate would be one of the most critical issue that the government has to sole. Although I do not know any other tools that the government can employ to help the economy, there will be times when the government runs out of its budget. The gap of the government's expenditure has to be filled with consumer's expenditure to keep the GDP going.
The unemployment rate is a lagging economic indicator, which means that it takes a while after policies are implemented and the recession is over for it to come back to its normal level. I think people are just anxious about employment levels and job availability which is obviously important however they need to be patient. Things will come around eventually.
I agree with Khoa. During these uncertain times when businesses are over analyzing every indicator, they are going to be very unlikely to hire on more workers (especially long term workers). Since unemployment is a lagging indicator it will take longer for it to recover than the other indicators. When the economy does start to turn around we can expect the unemployment rate to follow. I'm anxious to see when this will happen.
Post a Comment