February Job Report Indicates Employment Is Improving For Americans
In February, 236,000 new jobs were added, which far exceeded what was predicted to happen, a job increase of around 165,000. The creation of so many new jobs succeeded in dropping unemployment to 7.7%. Construction jobs too, were at a six year high with the creation of 48,000 new jobs. It appears that employers are starting to lift the hiring bans that have existed for several years now. Carla Ann Harris, managing director and senior client advisor at Morgan Stanley, commented in a Bloomberg interview: “People are starting to hire, and in fact they have been hiring for a few quarters…Some of the caution with respect to the payrolls is starting to abate. You’ll probably see a faster pace as people start to move towards growth as opposed to maintaining the status quo because of the uncertainty they feel in the market.”
Will Sequestration Squelch New Job Creation And Economic Growth?
Unfortunately, the celebration of new jobs, was slightly dimmed with the announcement of sequestration, and the enforcement of many Federal spending cuts that will lead to the destruction of as many as 700,000 jobs in 2013. The question is, will the budding economic growth be able to keep stride with the forces working against the economy? Without the influence of the sequester, many experts feel the economy could double its expected 1.5% growth rate, and could end up seeing unemployment drop further below 7.0%. While sequester may not worsen things economically from where they are at right now, it certainly won’t encourage further growth. Nigel Gault Chief United States economist at HIS Global Insight commented that lawmakers are standing in the way of economic growth, but at least we are able to carry ourselves with the current economic momentum.
Should Congress Intervene And Prevent The Sequestration?
House Speaker John Boehner, doesn’t believe that would be wise. Something has to be done about the nation’s current spending habits, and growth built on false security is not really growth at all. Boehner made the statement: “Any job creation is positive news, but the fact is unemployment in America is still way above the levels the Obama White House Projected when the trillion-dollar stimulus spending bill was enacted…And the federal government’s ongoing spending binge has resulted in a debt that exceeds the size of our economy.” (Quote taken from New York Times)
In many ways it appears that even though we are getting better economic reports and better employment data, there are still so many things threatening to work against the current economy, if not sequestration, then a federal deficit that threatens to swallow the economy whole. For more information on investing in today’s economic climate, speak to a Redhawk Advisor near you.