US Economy adds 103,000 jobs, but..

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US economy added 103,000 non farm payroll in the month of September higher than analyst expectations which called for 60,000 jobs. The unemployment rate stayed at a high of 9.1 percent according to Bureau of Labor Statistics. Even though new jobs were added to the economy, it was barely enough to keep up with growing labor force and the population.

Prior months job data was also revised and it showed that 99,000 more jobs were added in July and August. This places the jobs data in much better perspective than we had before. Both hourly rates and hours worked increased in September. Health care, retail and services sector contributed to most gains while manufacturing lagged behind shedding 13,000 jobs last month.

Economists expected at least 60,000 new payrolls originally. The number 103,000 is much higher because 43,000 striking Verizon workers were included in this report, otherwise the overall job additions are just around a non-impressive 60,000 as expected.

US economy needs to expand at the rate of 2.5 percent and add about 125,000 jobs per month just to keep up with the jobless rate.

Economist consensus is that job growth is falling short of the required numbers and thereby the 9.1 percent unemployment rates will not change over next few months at least. “It underscores the belief that the economy has skirted a recession but that’s not to say it’s out of the danger zone because there are significant risks out there,” said Millan Mulraine Senior Economist at TD securities.

Even though this unemployment report was a “non-horrible” number according to Jim Cramer, the number were not good enough to assure a meaningful and a strong recovery. The economy is definitely showing sluggish growth which underscores a point that a double dip recession is not in the cards, at least not yet. These kind of reports don’t work well for the stock market and it lost all of the gains and ended the day in red.

A lackluster recovery and a high unemployment rate will keep the pressure on President Obama and the Federal Reserve to do more and put more people to work. President has proposed his 447 billion dollar job plan two weeks ago, but a reluctant Congress has not implemented any provisions whatsoever. Members of Congress including the Speaker of the House John Boehner have in fact rejected those measures. With a divided Congress its impossible to see what will come out of it.

Whatever these numbers may be, ordinary American cannot feel at home and take solace even though the Great recession is over two years ago. There are 14 million unemployed people and another 6 to 7 million under unemployed. There at least 2.5 million people who have dropped out of labor market discouraged and not seeking work.

This in the end spells trouble for President Obama, whose Republican challengers are gaining ground and using these numbers against him in the political arena. Meanwhile protests on Wall Street are getting stronger day by day.

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