Businesses likely created considerable number of jobs in September, but the number is not nearly enough to reduce the nation’s unemployment rate.
Prior to the midterm congressional elections, the Labor Department will release the final monthly jobs report which will possibly leave President Barack Obama in a precarious position. The unemployment rate is likely to reach above 9.5 percent. In April, the U.S. unemployment rate moved up to 9.9 per cent.
It was estimated that around 75,000 jobs were added in September. Thomson Reuters’s survey shows that the rate is expected to surge to 9.7 percent from 9.6 percent. It is projected to top 10 percent by next year.
According to Nigel Gault, an economist at IHS Global Insight, little economic expansion does not give companies much reason for hiring. The economy grew at just 1.7 percent annual rate for the second quarter.
Previously, the National Bureau of Economic Research reported that the recession which began in December 2007 ended in June 2009. The 18-month recession was the longest and deepest one for the U.S. economy since the Great Depression.
Since the downturn ended in June 2009, the economy has expanded 3 percent, 3.5% lower than the pace of postwar recoveries. The number of people applying for unemployment benefits has declined to the lowest level since July.
It is likely that the Federal Reserve will mull additional steps to foster the economy, being expected to act to purchase government debt in an attempt to lower interest rates and stimulate more borrowing.
It is necessary to create 125,000 net new jobs to keep up with population growth. However, it is likely that private-sector jobs created in September will not reach the expected figure.
1.1 million Americans won’t resume their search for work until hiring picks up. According to Fed of San Francisco’ estimate, it would take private-sector employers two years to create 300,000 net jobs each month to ease the unemployment rate to 8 percent.
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