The U.S. economy has been going up and down in the last few weeks. The signs today are promising as the U.S. added 175,000 new jobs in February. With the better outlook, the U.S. stock market likewise begins to pick up once again. This is helped by last week’s report that the number of applications for unemployment benefits have been reduced to a very low level that was not seen for the past three months. The numbers are good since Standard & Poor’s 500 index this week reached its all-time high for the third time.
Good news
The reduction of the number of claims for unemployment benefits is the good news investors are looking for to indicate that the U.S. economy is recovering, which had slowed down for the past months because of the extremely grave winter.
There had been several smaller businesses that had to reduce their staff because of the harsh winter conditions. Some had to do some company restructuring and reduced their number of outlets, including Radio Shack and Staples.
The hard numbers
The Standard and Poor’s index increased by 0.2% or 3.22 points. Likewise, Dow Jones industrial had an average increase of 0.4% or 61.71 points. However, the Nasdaq composite fell slightly with 0.1%, which is equivalent to 5.85 points.
Economists expected that there would be at least 337,000 unemployment claims last week. But the actual claims only came up to 323,000 against the previous number of 394,000. This means that fewer people got laid off in recent weeks, which satisfies investors, as this indicate healthy growth despite the extreme weather conditions that continue to prevail. They are looking forward to better figures in the coming weeks as the winter storms are abating. This is the first clean reading of the economy after the bad weather.
A market strategist from Prudential Financial, Quincy Krosby, said that the next clean reading of the country’s economy will only be available when the bad weather is finally over, which could be after several weeks yet.
Low expectations
In December 2013 before the bad winter weather hit the U.S., the economy was generating about 225,000 jobs monthly. The number of jobs declined drastically in January but is now going up once again. Economists were even expecting that there will only be about 145,000 jobs available in February, so it is a nice surprise to see that the figure was higher.
Bracing for more good news
The severity of winter that engulfed most of the United States has been considered to have a major impact on the employment opportunities. However analysts are now saying that the impact was not that great. The U.S. Labor Department said that the hiring slowed down but there were still close to 7 million people that worked part-time jobs last February, which was 10 times higher than the numbers in January and the highest for the same month’s 1996 figures.
Pundits are predicting that the number of jobs available will continue to rise as the weather gets warmer.
Photo credit: Taken by Me haridas under Creative Commons Attribution-Share Alike 3.0 Unported License.
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