I walked into the office this morning to some extremely positive economic news that I have to share with you – that is if you haven’t watched the news yet today, been on Twitter, or perused some finance websites out there.
The unemployment rate fell to 8.3 percent. This is the lowest unemployment rate since February 2009.
Clearly, this news is nothing short of positive, that more and more people are getting jobs.
Employers added 243,000 jobs in January – a whopping 40,000 more people hired than in December (203,000).
Hiring was way stronger than most predicted. Economists forecasted 130,000 jobs would be added in January and that the unemployment rate would inch up to 8.6 percent. As a result, many economists and investors called it a “nice surprise,” “fantastic,” and “a touchdown!” Obviously, economists and investors are sharing the same sentiments I have.
Personally, I would call it “a deep three from downtown,” “amazing,” and “sensational.” When I say “sensational,” it only seems fitting to use a French accent for some reason. Don’t ask me why.
Private business added 257,000 jobs in January, continuing its trend of increasing hires each month since March 2010. On the other side of the coin, government jobs have been hit pretty hard and cut 14,000 jobs in January.
Employers have steadily hired more employees for the past four months, which clearly points at a positive trend happening here. I’m not saying that each month going forward will have more and more jobs – I’m just saying it is a very optimistic trend that can’t go unnoticed.
Combine the trend with the fact that 143,000 jobs were added to the economy in January 2011, and I think we can say that we’re taking small steps in the right direction.
This is all fine and dandy until you take a look at how many jobs are needed to fully recover from the financial crisis. To hit those levels, 5.6 million more jobs need to be added to the economy. If we keep this pace up and add around 250,000 jobs a month (an overly optimistic projection), we would need 22 years to hit that number.
Also, of the 12.8 million Americans who remain unemployed, 42.9 percent have been unemployed for six months or more. That’s pretty alarming to think about.
Nevertheless, and I didn’t mean to rain on the parade with that, this is extremely positive news to digest today.