U.S. economy is on an upturn boosted by job growth and increases in wages.
The US economy is rebounding
The U.S. added 321,000 new jobs in November – marking the biggest gain in nearly three years, reported Market Watch. Every industry added new employees and many of the new hires were in high-paying industries. Neil Dutta, head of economics at Renaissance Macro research expressed his excitement.
“November’s employment report was a knock out,” said Dutta, according to Market Watch.
Retailers also added 50,000 workers to their workforce to prepare for this years holiday shopping season. Economists indicated that employment numbers raised U.S. stock prices on Friday, which saw high levels of trading. Recent developments likely mean that the Federal Reserve will raise interest rates soon – expected to occur mid 2015. It is relevant to mention that short-term interest rates have been near zero since the financial crisis in 2008. President Obama noted that the gain in employment demonstrated that the U.S. economy is strong.
“The United States continues to outpace the rest of the world,” President Obama said, according to Market Watch.
Surveys of executives showed that most businesses believe the economy will continue to pick up speed in 2015. Many companies plan to hire more workers in coming months and falling gas prices could expedite the growth.
Consumer borrowing increases, but less than estimates
Consumer borrowing rose less than analysts forecasted in October, according to Bloomberg Newsweek. Credit saw a gain of $13.2 billion compared to the $16.5 billion 33 economists surveyed by Bloomberg had indicated. It is believed that Americans curbed their spending activities ahead of the holidays, to allow for purchases later in the season. Daniel Silver, economist at JPMorgan Chase, explained the credit market environment to clients in an email.
“The trend has cooled off in recent months following a period of stronger growth in credit earlier in 2014,” wrote Silver, according to Bloomberg Newsweek.
Employment is allowing Americans to keep spending money. The unemployment rate held at a six-year low of 5.8 percent, the Labor Department’s report showed, according to Bloomberg Newsweek.
It is important to mention that lower gas prices contributed to consumer spending over the past two months, which represents approximately two-third of U.S. economic activity. This year’s shopping seasons is expected to see strong sales and so far the economic indicators look good.Back To Blog