Home' Trinidad and Tobago Guardian : September 8th 2015 Contents A20
Guardian www.guardian.co.tt Tuesday, September 8, 2015
A Pakistani stock broker takes a nap at the Karachi Stock Exchange, KSE, in Karachi, Pakistan, yesterday.
The benchmark KSE-100 index was down 923.84 points in the morning session. AP PHOTO
NAPPING AT THE KARACHI STOCK EXCHANGE
WASHINGTON---On Labour Day
weekend 2015, the US job market
has found an old sweet spot: 5.1 per
cent unemployment---many miles
from the 10 per cent joblessness
America endured back in 2009.
It s the lowest rate in more than
seven years, suggestive of healthy
hiring levels that have traditionally
fostered rising incomes, consumer
spending and economic growth.
In August, the unemployment rate
fell on the strength of a decent if
less-than-stellar 173,000 added jobs.
And most economists expect the gov-
ernment to eventually revise up that
job gain because of seasonal trends
that are notoriously difficult to cal-
Friday s employment data reflected
the durability of the US economy,
which has so far withstood distress
worldwide: Tumultuous stock mar-
kets, a sharp slowdown in China, a
perpetually struggling European
economy and the start of a recession
in Canada, America s largest trading
Yet the report also spotlighted
aspects of an economic expansion
that has been steady without being
fully satisfying: Wage growth remains
slight. And millions remain relegated
to the sidelines of the job market.
Joseph LaVorgna, chief US econ-
omist at Deutsche Bank, grades the
job market as "good" but not great.
"It s a solid B," LaVorgna said.
"Definitely not an A."
5.1 PER CENT
That figure serves as compelling
evidence for why the US job market
is the envy of most of the industri-
The unemployment rate has
dropped a full percentage point over
the past 12 months, and for a good
reason: More Americans are finding
At previous times during the recov-
ery from the Great Recession, the
unemployment rate had dipped only
because many people had abandoned
their job searches and were no longer
counted as unemployed.
Employers have added nearly 2.6
million workers since last year---
about 764,000 more than the number
who left the workforce to retire, start
school or end their job hunts in frus-
tration, according to the government s
monthly survey of households. A 5.1
per cent unemployment rate also fits
the Federal Reserve s picture of a nor-
mal economy. And so it heightens
expectations that the Fed will raise
interest rates from record lows later
this month. Maximising employment
is one of the Fed s mandates.
But the Fed must balance that task
with its other mandate: To stabilize
prices. And across the economy, infla-
tion remains well short of the Fed s
two per cent target, at which point
a rate hike would be appropriate.
10.3 PER CENT
Besides the official unemployment
rate, the jobs report includes a broad-
er measure of joblessness: It takes
account not only of people seeking
work but also of part-time workers
who can t find full-time jobs and
other people on the fringes of the job
market. This broader measure was
10.3 per cent last month, relatively
high for a baseline unemployment
rate of 5.1 per cent.
When the unemployment rate was
most recently this low, in early 2008,
the broader measure was 9.2 per cent.
That gap between 9.2 per cent in
2008 and 10.3 per cent today trans-
lates into an additional 1.9 million
Americans who are still barely getting
by, testament to a job market has yet
to fully heal.
That s the average monthly job
growth over the past three months.
That average could rise later because
economists say seasonal adjustment
quirks could cause the August jobs
figure of 173,000 to be revised up by
50,000 or more.
Why do job gains of more than
200,000 matter so much? It s roughly
twice the monthly influx of workers
into the job market. It means that
demand for workers exceeds the
incoming supply and suggests that
employers foresee continued cus-
Tellingly, hiring in August shifted
away from sectors with heavy expo-
sure to the global economy. Manu-
facturers, for example, shed 17,000
The pace of hiring also slipped for
More than half the added jobs came
from industries largely insulated from
overseas turmoil: Government, edu-
cation and health services.
Their share of job growth nearly
doubled last month from 27.1 per
cent in July. (AP)
Snapshot of US
Solid hiring but
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