Report on Weak Employment Expected
The Labor Department is expected to report 60,000 jobs created in October. Such jobs are not enough to keep pace with population growth and return the 15 million unemployed Americans to work.
Bank of Tokyo Mitsubishi senior economist Ellen Zentner said that the U.S. economy would have to be creating at least 250,000 jobs a month to trim unemployment rate each month in a meaningful way.
The unemployment rate is projected to remain 9.6 percent for a third consecutive month. The rate climbed 9.7% in October. This would be the highest unemployment rate since May. According to economists, unemployment remains above 9 percent through next year.
The Fed’s $ 600 billion purchase of Treasury bonds are intended to slash interest rates on mortgages to stoke the economy. In addition, the purchase is expected to start the chain reaction which finally create employment and accelerate economic recovery. The Fed would buy the bonds at a rate of around $ 75 billion a month through the middle of 2011.
New members of the House and Senate will take office in January. Thus, current members still suffer from burden to energize the economy.
The 2001 and 2003 tax cuts are scheduled to expire this year-end. However, many economists believe that lawmakers will give extension.
Fed Chairman Ben Bernanke said that the job market was still weak, giving that numerous people can find only part-time jobs.
The number of people filing for unemployment benefits rose steeply after saw decline in the two previous consecutive weeks. Initial jobless claims had been expected to reach a seasonally adjusted 445,000 in the week ended Oct. 30. According to U.S. Labor Department data, claims for the preceding week were revised up by 3,000 to 437,000. The weekly applications for unemployment benefit signal whether companies are hiring.
Labor productivity rose 1.9 percent in the quarter ended in September 30 while it fell in the April-June period.
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