Risks and Strength
By Isaac Cohen*
Recent indicators reveal the US economic reactivation is proceeding at a moderate pace, with low inflation. However, Federal Reserve Chairwoman Janet Yellen, in a speech at the Economic Club of New York, said global economic and financial events are generating risks which have contributed to financial market volatility.
Among these global risks, Chair Yellen identified specifically the slowdown in China and the prospects for commodity prices, particularly oil. The concern is that these headwinds could eventually slow US economic activity, which has continued despite these less supportive external circumstances.
For instance, 215,000 new jobs in March confirmed the strong pace of employment creation in the United States of the last two years. Even so, the unemployment rate increased slightly to 5 percent, from 4.9 percent in February. This was due to an increase in the number of persons of working age that are employed or looking for a job, which brought the rate of participation in the labor force to 63 percent, from 62.9 percent, the highest level in two years.
The impulse came from solid domestic demand, in sectors such as health care, hospitality and retail. By contrast manufacturing, haunted by the strong dollar, together with mining, which includes the energy sector, both lost jobs in March.
*International analyst and consultant. Commentator on economic and financial issues for CNN en Español TV and radio. Former Director, UNECLAC.