Summary: Following up yesterday’s post (the good news is that the bad news about the economy is wrong), we have a cheerful view of the economy.
A Brighter Outlook for America’s Unemployed
by John Ridlehoover of the VA Home Loan Centers
Over the last several years, the unemployment rate in the United States has been in a state of flux. In 2008, the United States saw a low unemployment rate of only 4.7%. After the collapse of Wall Street and the U.S. housing bubble burst in 2009, the unemployment rate had grown to around 10.1%. In 2010, the number of unemployed Americans was roughly around 6.8 million, which was the peak of unemployment.
A large unemployment rate puts a halt on the economy of a country as a whole. The more unemployed citizens mean the less consumer spending there will be. Consumer spending and the building of new businesses are keys to growing an economy.
During the first few months of the year, the economy fell 0.7%. Economists believe this drop to be caused by the extreme winter we had this year. The winter weather caused everything to slow down, including US ports.
Though America has seen dark times as far as unemployment, May and June of 2015 have shown strong job growth in some time. With over 470,000 jobs created, the number of unemployed citizens fell from close to 7 million to 2.5 million. Chief economist at Bank of the West in San Francisco, Scott Anderson, has said about the current job market, “Job growth roared back to life in May.”
Many of the new jobs come from healthcare, hospitality, and construction companies. There has been a rising demand for new homes, which explains the growth of jobs in the construction industry. Another industry that has seen large job growth is manufacturing, which was caused by the high demand for automobiles. In fact, May has shown the highest demand for vehicles since July 2005.
So far, over 3 million Americans have rejoined the workforce. Not only that, the number of American citizens applying for unemployment benefits has greatly decreased. The number has remained under 300,000 for months, which is the lowest it has been in years.
Not only has there been a large growth in jobs, but there has also been a notable increase in job wages. US wages have grown by 0.3% . Notably, the minimum wage increased in several states. Recently, the Labor Department has proposed to increase the federal threshold of wages paid to employees that work overtime. The current threshold is “time-and-a-half” for workers that work more than 40 hours per week. Even with the inflation of the 1970s, the threshold was not changed to keep pace. News of the outcome of this proposal should be unveiled within the next few days.
Economists are optimistic about the economy, expecting it to grow around 2.5% this year.
Forecasts of US GDP
The Atlanta’s Fed’s GDPnow model and the Blue Chip Economists as of July 7…
About the author
John Ridlehoover has a Bachelor’s Degree in Professional Writing, and has published at several magazines and websites.
About the VA Home Loan Centers
VA Home Loan Centers is a company that helps veterans, active duty, and their family members obtain their VA home loan benefits. If you or someone you know is interested in applying for a home loan, find out more information at their website.
For More Information
- Dreams of a boom fade & attention turns to secular stagnation.
- Economic status report: good news plus chaff from doomsters.
- What does our surprisingly slow economy in Q1 tell us about the future?
- About our slowing GDP: are we near a recession? are the models accurate?
- A secret of the new business cycle, & why good predictions have become so rare.
- Put the latest stats in larger context to understand the economy.