Today’s Labor Department’s jobs report for April lends some insight into why the Federal Reserve hasn’t raised interest rates again.
The U.S. economy added 160,000 nonfarm jobs last month, which sounds good, but that was down from the 200,000-plus jobs that the economy had added during each of the past few months.
Unemployment remained unchanged at 5 percent with about 7.9 million people in the U.S. seeking work.
“Job gains occurred in professional and business services, health care and financial activities,” the U.S. Bureau of Labor Statistics reports. “Job losses continued in mining.”
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The Federal Reserve Board in December for the first time in years raised its key rate from a record low near zero. But signals of a weakening overseas economy — particularly in China and Europe — and softening job and manufacturing markets at home have caused the Fed to hold off on raising rates again. Raising interest rates in the U.S. could stifle growth in the U.S. economy.
President Barack Obama in a statement today applauded the job figures, saying: “Seven years ago, in April of 2009, our economy lost nearly 700,000 jobs, and the unemployment rate hit 9 percent on its way to 10 percent.” Obama noted that April was “the 74th consecutive month of private sector job growth in America.”
“Over that record streak of job growth, our businesses have created 14.6 million new jobs in all,” he said. “Wages have been rising at an annual rate of more than 3 percent this year.”
But Obama noted that the global economy hasn’t kept pace. “You're still seeing lagging growth in places like Europe, Japan, and now China,” the president said.
“Here in the United States, there are folks out there who are still hurting. And so we've got to do everything we can to strengthen the good trends and to guard against some dangerous trends in the global economy. And if the Republican Congress joined us to take some steps that are pretty common-sense, then we could put some additional wind at the backs of working Americans.
That would include creating jobs through building such things as new roads, bridges, schools and water mains.
That would help offset layoffs announced by several major corporations, particularly in fossil fuel related energy sectors, also should give the Fed pause.
“Mining employment continued to decline in April (minus 7,000),” the Labor Department reports. “Since reaching a peak in September 2014, employment in mining has decreased by 191,000, with more than three-quarters of the loss in support activities for mining.”
Job losses are expected to continue in energy related areas as the nation moves more toward renewable sources of power. Overall that’s beneficial for the planet because of the corresponding reduction of greenhouse gases, which have caused temperatures on the planet to increase.
Politically, the changing energy picture is causing angry and frustrated Americans to gravitate to the campaigns of Republican presumptive nominee Donald Trump and Democratic challenger Sen. Bernie Sanders. Each is promising to restore America.
But the details of their campaigns if enacted into policy could make matters worse. They include tariffs and other restrictions on trade.
As the country moves closer to the Nov. 8 general election, the Labor Department’s jobs reports and any action by the Fed on interest rates, should gain a lot more attention from voters as people worry about the effect the next president’s policies will have on the U.S. and global economies.