7% unemployment

Por Isaac Cohen

Five years have passed since the Labor Department registered 7 percent as the US unemployment rate. This figure is also the best President Barack Obama has seen, since he was elected in November 2008. By the time President Obama was inaugurated, the the unemployment rate was 7.3 percent, it reached 10 percent in October 2009 and it has slowly declined ever since.

Last November, the creation of 203,000 new nonfarm jobs was preceded by the creation of 204,000 in October. All economic sectors added jobs in November, including manufacturing, construction and leisure and hospitality.

The question raised by these positive employment numbers is how the central bank will read them at its next 17-18 December meeting. That is, if it will see them as a strong signal to start dismantling stimulus measures, such as bond purchases and keeping interest rates near zero.

Some central bank officials have sounded a note of caution about these figures. Because for three consecutive years the US economy has seen vigorous job creation by the end of each year, followed by a slowdown in the Spring. For instance, last July job creation reached only 84,000 new jobs.

Another indicator seen as pointing toward delaying the central bank decision has to do with inflation, which remains under the objective of 2 percent a year.

*International analyst and consultant. Commentator on economic and financial issues for CNN en Español TV and radio. Former Director, UNECLAC Washington Office.


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