Positive Signs In The U.S. Economy

Tying a four-year low, fewer people sought unemployment benefits this past week of March. This has added confidence the job-market is showing signs of growth and strengthening. Applications for unemployment aid were down 14,000 to a seasonally-adjusted 351,000 according to a report released by the Labor Department. This has been a positive trend over the past six months as the average has declined 14% since October 2011.

Following this steady decline in unemployment benefits, employers have added an average 245,000 jobs a month between December and February. This amounts to the best three months of hiring in the past two years. The unemployment rate has also declined to 8.3%, the lowest in the past three years. This trend is expected to follow for March, with an additional 200,000+ jobs being added. This indicates the labor market is steadily growing, slowly indeed, but improving none the less.

February's rise in gas prices did drive U.S. wholesale prices up last month, but excluding this, inflation did not change significantly. The producer price index rose 0.4% and the core index (which excludes food and gas prices) increased 0.2%. In the past year, wholesale prices have increased 3.3%, and this represents the smallest year-over-year gain since August 2010.

All things considered, the job growth is driven by a stronger economy, which grew at an annual rate of 3% in the last three months of 2011. Consumers show more confidence and have added additional spending to the market. Auto sales and the stock market have both shown positive growth over this same period.

Manufacturing has also expanded in February. Manufacturing conditions rose in March to 12.5 on the index of manufacturing conditions, a measure used by the Federal Reserve Bank to measure the strength of the manufacturing sector. The Labor Dept. reports that in the last week of February, manufacturing jobs have grew by 31,000, and over the past year, jobs had increased by 227,000.

While these signs of growth are during an election year and the U.S. economy is still on a long path to full recovery since the 2007 recession began, these positive signs re-enforce my view America is back on the right track.

Sources: AP.

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