The U.S. jobless rate still continues to drop by 7.7 percent in November, according to the U.S. Labor Department. This rate however is the lowest in four years.
Since the country suffered tremendous economic slowdown in the quarter of 2008, it has continually suffered unemployment. A slow employment recovery pace was experienced even with the government’s initiatives for the past four years.
However, ending the year of 2012 is a tremendous rise of employment with addition of 146,000 jobs in the month of November. The U.S. had an average addition of 151,000 jobs a month this year. More companies were seeking workers partly due to the impact of hurricane Sandy and the early holidays this year.
However, despite the good employment news, economists worry that it might slow down if President Obama cannot finalize the plan on reducing the budget deficit next year. The uncertainty of the budget may lead to $600 billion government spending cuts as well as automatic tax increases according to economist. In fact, economists predicted that the deficit might lead to another recession at the end of 2013 if no grand move will be in place.
Ethan Harris, co-head of global economics at Bank of America Merrill Lynch, said that while it may be encouraging for companies to hire despite Washington’s uncertainly, if budget issues are not solved, jobs growth may weaken next year and may be a risky move for companies.
Despite the lowering of unemployment at the end of the year 2012, the pace is not enough to pull-up higher wages despite Washington’s initiative to put up short term solutions on budget.
The size of the labor force is also not enough to match the demand of jobs partly due to the number of workers who opted to retire and those who were discouraged by unemployment within the long span of recession. In fact, the size of the labor force shrank by 350,000 in November.
According to Nigel Gault, chief economist for IHS Global Insight, the number of labor force at 6.3 percent is low in the U.S. labor historical standards. The jobless lowering rate is not enough to bring back discouraged labor force to job hunt.
Meanwhile, despite economic critic predictions, employment may still regain with the coming of the holidays and the impact of hurricane Sandy. One ironic turnabout may be on the dreadful impact of hurricane Sandy which lowered employment in the construction that may lead to a grand pick up in the construction employment sector this December as homeowners will opt to rebuild their houses.
Another employment growth is on retailer’s employment seeking up to 53,000 laborers this December due to the holiday peaks. This number is triple the amount of last year’s.
According to Julia Coronado, chief North American economist at BNP Paribas, the sales promotions and early thanksgiving has provided great impacts of labor seekers in terms of retail employment.