This week has been a roller-coaster ride for the U.S. economy. On Monday, reports showed that orders for big-ticket factory items were up 4.6 percent in December. Tuesday showed that home prices had the strongest year-over-year growth since 2006. But Wednesday revealed that GDP actually contracted by 0.1 percent. Now the Labor Department is out with its latest job numbers.
157,000 jobs were created last month, which was in line with expectations. But the unemployment rate actually ticked up a hair, to 7.9 percent. So what are we to make of the latest numbers?
“It’s kind of more of the same,” says Julia Coronado, chief economist with the investment bank BNP Paribas. “It’s okay, it’s pretty good, but as we saw with the unemployment rate, it’s really not enough to make headway into rehiring the people that have been sidelined throught the recession.”
But Coronado is more interested in the long-term outlook. In addition to the January numbers out today, there were also revisions to previous months. They revealed that job growth in November and December was better than previously thought.
“In November, we got the biggest upward revision,” says Coronado, and “the three month picture looks decent right now.”
But Coronado cautions, “This is why we want to be cautious and kind of look through some of the volatility and take some averages over the last half of the year. If you look at GDP, GDP grew 1.5 percent, that’s a very moderate pace of growth. And over the last half of the year — over the last 6 to 7 months, we’ve seen job growth a little bit higher than 150,000. So I think the stories are consistent if we smooth through some of the volatility.”
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