The U.S. Department of Labor has released another unemployment reports. For the first time in over 49 years, the unemployment rate dropped all the way down to 3,9%. For the most part, this has to do with a considerable decline in the economically active population.
Last month, the amount of economically active Americans decreased by 490K people. The reason for that is believed to be an increase on the amount of retired people and students who don't need jobs. At the same time, the world's biggest economy increased the amount of new jobs by 263K, which had positive impact on the unemployment rate. At the same time, the average annual earnings increased by 3,2%.
According to analysts, all of the changes seen over the reporting period indicate a stable and healthy state of the American economy. On the other hand, the pace of economic growth in the United States doesn't allow us to expect an interest rate changes by the Federal Reserve.
The actual figures are pretty decent, Ian Shepherdson from Pantheon Macroeconomics assumes. But at the same time, the expert hopes that the current pace of earnings growth will remain at the same level. Most likely, the U.S. unemployment rate will keep going down in the near future, with a further increase in average earnings. Also, he says that that the current employment stats have no direct impact on the Fed's monetary policy. However, if the tendency persists, the Fed may dare make changes to its current monetary policy.
Some other experts also assume that the recent stats have been very positive for the American economy. They assume that the stats may even influence the views of those expecting an economic recession in the United States to make them hesitate about their forecasts.
On the one hand, the actual unemployment rate takes the USA to the top of the world unemployment rankings. Still, we need to take into account several key factors. The thing is, the current unemployment rate reflects both the amount of working Americans and the amount of those Americans who aren't currently looking for a job. The latter aren't considered as the unemployed. At the same time, the figures reflecting the amount of Americans looking for a job only make it possible to put the United States in the middle of the global rankings.
It's interesting to note that previously the Federal Reserve expressed their concerns regarding the amount of the actively productive population who don't fall under the term "labor force". This is explained by a number of reasons, with one of the key reasons being their health state because of drug abuse and some other reasons.
Poor Economies See Increasing Unemployment Rate
In mid-February, the International Labor Organization released another report on the situation on the global labor market situation in 2018. It turned out that the 172 million people, or around 5% of the global labor force, were trying hard to get themselves a job but eventually failed. This information gives us an opportunity to make a number of interesting conclusions.The good news is that for the first time the unemployment rate dropped all the way down to the pre-crisis level. However, it took the market 9 years to recover. As you probably know, the unemployment rate increased up to 5,6% during the crisis years. The report says that the employment growth was mostly driven by rich economies. At the same time, poor economies saw higher unemployment. The tendency is expected to persist over the next few years.
