The Growth of Confidence in the US Economy

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( — July 14, 2016) —Employment in the United States has significantly improved in June as companies post 287 000 job openings, compared with only 38 000 in May. But, the unemployment rate, however, rose 0.2 percent reaching 4.9 percent, as many Americans began looking for work, reports the Voice of America.

Job growth in June represents a significant boost to the US economy, while the state of global economy is less certain.

Great Britain continues to suffer from post-Brexit consequences, while the status of emerging economies is not at its best. This fact, together with the strengthening of the US dollar could have a negative effect on US exports.

Mark Hamrick, analyst for explained to the Voice of America that the news about job openings in June is good, but in some ways it seems that the more things change the more they look the same.

This is because, despite the favorable figures, the increase in job opportunities is 25 percent lower compared with the same period last year. However, the White House pointed out that the latest report on job opportunities means that the US economy has added 15 million jobs after the recession.

”Remember that consumption makes up two-thirds of the US economy. So that higher consumption drives forward the entire economy. If you have more jobs and more people will have the cash in their pockets to go shopping,” Hamrick said.

What is less clear is whether the favorable reports on employment growth indicate that the Federal Reserve should raise interest rates.

According to economist Curt Long, this report in many ways removes the negative effects of the weak report in May, but it does not indicate that the Federal Reserve should hurry to raise interest rates.

The inflation rate is still below 2 percent, a level that the Fed likes to see, while earnings are almost at the same level. Therefore, economists believe that the Federal Reserve is unlikely to raise interest rates at its next meeting.