New Jobs Created In The US Market Amid Slower Business Investments

The US job market has been able to add 287,000 new jobs out righting fears for possible economic slowdown following a weaker start to the calendar year. The new job figure appears to be quite astonishing compared to only 11,000 jobs recorded during May.

The new job data, announced by the US Labor Department on July 8, are also stronger than the forecast. Dollar has appreciated some value and yields from US government bonds have increased a little, which indicate for a possible US rate hike. Meanwhile, the US unemployment rate has been increased to 4.9% from 4.7%, recorded in May, reports BBC quoting a different set of statistics.  

   

Economists have predicted for the job growth amid fears for repetition of the dismal figures of May indicating further deepening into economic slowdown. However, the recently disclosed employment data has surpassed forecasts while recording job gains from a vast range of industries. Moreover, the Us Labor Department’s announcement diminishes anxiety over emerging threats originated from Brexit, according to a report published in The Washington Post.

Voting in favor of Brexit by the Britons has already caused appreciation of US Dollar against Pound Sterling. This indicates a possible slowdown in US exports to the UK. Quoting Tara Sinclair, chief economist for job site Indeed and a professor at George Washington University, The Bulletin represents the job numbers as exciting.

However, some economists have warned over possible volatility in a single month’s reading and suggest interpreting the data as part of a longer period to define the trend. Comparison of the new employment figure with other growth figures indicates steady expansion of the US economy instead of surging due to ongoing recovery from the global recession.

The US job market has been adding 172,000 new jobs on an average per month since the first month of 2016. However, the figure seems to be lower compared to that recorded in 2015 which is again lower than a year earlier. Thomas Perez, the US Labor Secretary has described the figures as predicted from a fully healed job market, while addressing an interview.      

Hospitality, retail and healthcare services have created jobs in June while flat growth has been recorded for the construction and manufacturing sectors mainly due to stronger dollar and weaker export growth. At the same time, the mining and transportation sectors have reported job cuts.

However, economists still warn over long term challenges for the US economy. According to their analysis, lower investment in businesses also indicates for an economic booming in the near future. Since Brexit may spark deeper crisis elsewhere in the world, so investors will keep their investments at hold during the next few months, analyzes Joseph Lake, director of global forecasting at the Economic Intelligence Unit.