Thursday, February 14, 2013

Economy: Spring On The Job Market

It`s chilly in New York, but the sun is warming us up - a least a bit. And there is more to warm us up. This morning we got news that in the US the weekly initial unemployment claims declined 27,000 to 341,000 (calculatedriskblog). Hence the positive trend on the jobs market continues "that has been slowly but steadily improving for the past four years" (scottgrannis).

Bloomberg comments that "a drop in firings will probably help workers feel more secure in their jobs, which, combined with a housing-market rebound and rising stock prices, may bolster consumer confidence and in turn spending" (bloomberg). 

Well said. We are enjoying now a virtuous circle, meaning that there are some positive developments which are strengthening each other: The healing job market is fueling the climbing consumer spending, the recovering home market and the rising stock market, which all translate again into gains on the job market.

I believe this favorable situation will continue a while because the US enjoys some beneficial tail winds from rising exports (especially to China and other emerging markets) and climbing company profits (as a result of the advancing efficiency thanks to the technological progress).

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