US economic progress exceeded expectations in October, with 204,000 jobs added to the economy. Economists and employment experts were pleasantly surprised by the statistics from the Labor Department, which indicate that the 16-day shutdown of non-essential US government services did not affect job creation.
The new job figures are one of several positive indicators for the US economy. Over the last month, other reports have indicated that the United States economy grew at 2.8% annual growth page – a significant increase above the growth rates touted by major economists and financial commentators.
Investors believe that an extended period of economic growth could lead to a rapid decline in the economic stimulus packages currently being operated by the Federal Reserve. The central bank has hinted at reducing its stimulus programme over the past year but uncertain economic figures have left it largely unchanged.
Analysts had expected an increase in employment, but most estimates were below the 204,000 jobs created in October. Markit chief economist Chris Williamson said that the new figure “defied” expectations, and that most “analysts were expecting a mere 125,000 rise” in the number of new jobs in the United States.
Despite the increase in new jobs, the unemployment rate throughout the US rose by a slight amount, increasing from 7.2% to 7.3% for the month. Analysts believe that the shutdown of non-essential government services resulted in many government employees being classed as “unemployed” during the survey period.
Other economic concerns include a decline in consumer spending – considered to be an essential element of US economic growth. Consumer spending accounts for more than 60 per cent of US economic activity, and has slowed in the past quarter to rates that have concerned analysts.
However, economists believe that an increase in the number of people buying new homes, as well as rising export figures, show a healthy future for the US economy.
