Things are looking good for the United States Labor Department, as 295,000 new workers were hired in February. The unemployment rate fell to 5.5 percent, the lowest number since mid-2008, leading to a new, positive attitude towards the economy’s recovery. Analysts speculate that the Federal Reserve may raise interest rates in June rather than waiting until September.
These optimistic projections are not without drawbacks. In February, wages only increased by 0.1 percent, a decline from the 0.5 percent increase in January. Average hourly wages have only been increasing at around 2 percent annually for the past few years. This slow growth in pay signals that the economy is far from where it should be and is the reason why many Americans still feel that the country is still in recession. In addition, the news spurred a rise in the yield on a 10-year bond and drove the stock market down on Friday morning. Investors fear that the increasing interest rates will cut into corporate profits and lead to decreasing stock prices.
The increase in jobs this past month was primarily in the services industry. Leisure and hospitality added 66,000 jobs, while health and education added 54,000 jobs. The construction sector increased by 29,000 jobs and manufacturing increased by 8,000 jobs. The job growth is beneficial; however, employees are not content. They want retailers like Walmart to provide workers with stable hours and predictable schedules so people can plan their lives and pay their bills on time.
Although the jobs report has adverse results, I think it has long-term benefits. The stock market will see losses as interest rates increase, but rising interest rates will lead to an accelerated economy and more lending/borrowing. This will create a springboard for the country’s recovery. I am confident that with increasing job report and an increase in interest rates, the United States will be able to grow to its full potential coming out of the recent recession.
-- Jonathan Wang