During the month of November, the country’s unemployment rate dropped to seven percent and 203,000 new jobs were added, according to the U.S. Bureau of Labor Statistics. The newly strengthened job market could lead to economic growth.
Many of these jobs were in higher-paying industries. Manufacturing saw its highest gains since March 2012, with 27,000 new jobs added. Construction also saw significant growth with the addition of 17,000 new positions. Together, these two industries have created 113,000 new jobs during the past four months.
Steady Employment Growth
November marks the fourth consecutive month of strong hiring growth in the U.S., cutting the unemployment rate to a five-year low, reports The Associated Press.
An average of 204,000 jobs per month were added between August and November, marking a sharp rise from the 159,000 average monthly job increase from April through July.
Additionally, the economy experienced its fastest growth rate since early 2012 during the third quarter of the year, at a 3.6 percent rate of expansion. However, nearly half of the increase was caused by businesses building their stockpiles, as consumer spending during this time period was at its lowest rate since late 2009.
If the increase in jobs continues, it could lead to greater spending. More jobs typically results in higher earnings, which leads a chain reaction of increased spending and faster economic growth.
From April to October nearly half the jobs added were in the following industries ─ retail; hotels, restaurants, and entertainment; temp jobs; and home health workers.
The Federal Reserve Reacts
As the Fed has attached its stimulus efforts to the unemployment rate, Chairman Ben Bernanke has said it will lessen its monthly purchases of $85 billion bonds when solid evidence of an improvement in hiring exists. These bond purchases have help to keep long-term interest rates low.
Recent economic improvements have been unexpected. Between the October government shut down and disappointing early reports on holiday shopping, economists anticipated slower growth rates. The National Retail Federation reported that sales during Thanksgiving weekend fell for the first time since the organization began monitoring the numbers in 2006.
While customers may be purchasing fewer items, sales for pricy big-ticket items haven’t slowed. In fact, Autodata Corp. reported November was the best month for auto sales in the past seven years. Sales of new homes are also on the rise again, after a drop during the summer months.
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