By TraderVox.com
Tradervox.com (Dublin) – A Labor Department report released on Friday Octaber 5 showed that companies in the US added more jobs than forecast, diminishing concerns about the US economy which is facing a major fiscal squeeze. The report showed that the US employers added 121,000 jobs against an expectation of 120,000. The previous report had shown that employers added 88,000 workers per month in the second quarter. The report further indicated a significant increase in the total payrolls including government, which rose to an average of 146k a month from the 67k in the second quarter.
Bruce Kasman, who is the Chief Economist in New York at the JPMorgan Chase & Co, noted that the improved momentum in the US hiring is a positive for the economy and the dollar which has weakened in the last quarter. The business climate in US had spurred speculation that companies would reduce hiring as they anticipated a $600B government spending-cut and tax increase in 2013 as the government initiates a fiscal squeeze that has been opposed by the Congressional Budget Office. The CBO warned that US economy would fall into recession if the Congress were to go ahead with the fiscal squeeze.
Kasman also noted that the Labor Department figures suggest that the economy is expanding in accordance with the expected pace of around 2 percent. According to Arne Sorenson, who is the CEO and President of Marriot International Inc, the business outlook for the US and Canada is steady. She projected that the Gross Domestic Product for the US would be at 2 percent for the next year. Other positive indicators include the growing confidence in the automakers as cars and light trucks sell at the fastest pace in four years.
Positive sentiments from Kurt McNeil, the GM’s Vice President of US sales, show growing business confidence in the US. Kurt noted that automakers are being encouraged by the housing sector, reduced unemployment claims, and higher consumer spending and sentiment.
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