This unexpected resilience has raised questions about the Federal Reserve’s Quantitative Easing program. Experts believe that this may indicate that they will stop pumping money into the economy earlier than initially scheduled.
Preliminary predications indicated that job growth would not increase this past month due to the 16-day government shutdown. Despite this, jobs in the nation did increase with over 200,000 new jobs being created.
Although the unemployment rate increased from 7.2% to 7.3%, it is thought that the temporarily furlough on the hundreds of thousands of employees many have contributed to the increase. In addition, the report speculates that many other companies may have held off hiring new employees or expanding current projects until the government freeze had come to an end.
This information has caused many experts to suggest that job growth would have been much higher for the month of October had there not been a government shutdown.
This indicates higher growth rates for upcoming months. According to an analyst at Moody’s, job creation could reach 250,000 per month by mid-2014.
There was a broad spectrum of industries that contributed to the increase in job creation last month such as healthcare, retail and computer design.
In addition, the report indicated that the figures for the previous two months have been increased by approximately 60,000.
Many were happy to hear the news of an improving economy but that raised questions concerning QE tapering.
The Federal Reserve have not yet made a statement about the latest data but many experts are waiting intently.
Chief economist at Markit explained, “The data will add to the view that the Federal Reserve is gearing towards a tapering of its asset purchases, but policymakers will most likely wait for clearer signs that the economy is capable of growing at a faster rate than seen in recent months, hoping to see a pace of economic growth that will eat into unemployment.”
While the US economy may not be at an ideal place, it is undeniable that it is, in fact, growing at a steady pace. Whatever the outcome of the current situation, it is highly probable that any decision the Fed makes will affect the global market place.