employment
Last Friday, March 5 it was announced that the unemployment rate in the U.S. remained at 9.7% and the payroll of workers fell less than expected, as analysts expect more disappointing data taking into account the heavy snowfall that punish the East Coast and forcing many workers to stay home temporarily.
Going to the numbers, the payroll jobs fell by 36,000 last month, when analysts expected a larger number. The positive news was that the Manufacturing and Industrial sectors created new jobs, partly offsetting the workers dismissed by the construction sector.
For Manufacturing, the second consecutive month that employees are added to the existing workforce, which has not occurred since 2006.
“We have an economic recovery can be seen in the numbers: the labor market continues to improve for those with the skills demanded” said John Silvia, chief economist at Wells Fargo Securities LLC, who was one of the few who got it right with his forecast referred to the known data.
The average of analysts surveyed by Bloomberg News risked a loss of 68,000 jobs and a rise in the unemployment rate to 9.8%, and hence the positive market reaction.
Projections from now on
In another survey conducted by the same source, the average of economists projected that the unemployment rate will average 9.8% in 2010 but that by the end of the year could drop to 9.5%.
Clearly with this consensus of scholars is more inclined towards an improvement in macroeconomic conditions in North America, which remains to be seen is whether it will speed the pace and the market expects.
Obama “the Keynesian”.
The U.S. president, Barack Obama, seems wise to emphasize the labor market recovery. Recall that took office at the height of the economic crisis in the subprime, responsible for the loss of 8.4 million jobs in the U.S. alone
To stimulate the economy and encourage entrepreneurs to invest and create new job vacancies with it, Obama seems to have become quite “Keynesian”, by significantly increasing public spending in the country North and thereby worsen the fiscal accounts.
You may have to bear with this trigger conflicting views of his advisers from the Fed and some of the economic cabinet, historically monetarists and therefore disagree with the tax measures.
Recall that for the Keynesian unemployment is the biggest threat to an economy, so when this happens the state should intervene through public works to employ people who do not have jobs.
For monetarists, however, the main threat is inflation, and all efforts are focused on keeping inflation contained through tight monetary policy and expansionary central bank.
Another important difference is the concept you have school again and the rate of interest: while for the monetarists interest is simply the price of money, the Keynesians tend to see it as the opportunity cost of investment.
Finally, there’s a point at which both currents seem to agree after leaving the education crisis 30: monetary policy is like a rope of a kite, you can pull it to attract the barrel, ie cool economy, but you can not pull the string for the kite flying, or the economy out of recession.
Obama seems determined to lower the unemployment rate at all costs. Hopefully this is not the breeding ground sometimes necessary (low rates for extended times, increased spending, twin deficit) for the appearance of the next financial bubble.
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