Jobless rate falling faster than many predicted

by Adrienne on March 7, 2012

The economy has been creating more jobs since last fall, producing an average of 223,000 new jobs a month in December and January. Economists are betting the government’s employment report for February, coming Friday, will be another reasonably good one, according to a Bloomberg survey showing an average prediction of 204,000 new jobs. However, the unemployment rate drop more rapidly than many expected, as joblessness slid to 8.3% in January and predicted to be  9.1% in August.

Some economists say the real reason for the recent fast drop in unemployment isn’t that there are suddenly so many new jobs — it’s that far fewer people than expected are looking for work.He sees the unemployment rate falling to 7.8% by the end of the year, and 7% by 2013. That’s based on his forecast that the economy will add 200,000 jobs a month through 2012 and the labor force participation rate will hold steady, as fewer workers to return to job-hunting than others think.Until last month’s better-than expected jobs report, economists were almost universally pessimistic about the unemployment rate improving much this year.

“The decline in the unemployment rate over the past year has been somewhat more rapid than might have been expected, given that the economy appears to have been growing during that time frame at or below its longer-term trend,” Bernanke said. “Notwithstanding the better recent data, the job market remains far from normal.”

As shown, the high number of unemployment rate would not help the economy. Therefore, Nike’s sales would either maintain a plateau or decrease. This is because the income of some families would remain the same as those unemployed are not looking for jobs.

Source: http://www.usatoday.com/money/economy/story/2012-01-30/cutting-the-jobless-rate/53390626/1

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