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VOL 23 NO 58 REGD NO DA 1589 | Dhaka, Friday, January 8 2016
Posted : 08 Jan, 2016 16:01:37 AA-A+
US job market healthy despite slowing economy

U.S. employers maintained a fairly strong pace of hiring in December, suggesting that a recent but sharp manufacturing-led slowdown in economic growth would be temporary.

Nonfarm payrolls probably increased by 200,000 jobs, just a slight step down from the 211,000 created in November, according to a survey by economists. The unemployment rate is expected to have held steady at a 7-1/2-year low of 5 per cent.

A solid employment report could soothe fears over the economy's health by showing recent weakness largely contained in the manufacturing and export-oriented sectors, which have been hit by a strong dollar and anemic global demand.

Efforts by businesses to whittle down an inventory glut and spending cuts by energy companies have also inflicted pain.

"The U.S. economy is a two-sided economy. The domestic sector continues to power job growth. There is a risk that the weakness in manufacturing could spread to services, but we don't see that right now," said Thomas Costerg, a senior economist at Standard Chartered Bank in New York.

In the wake of soft reports on manufacturing, construction spending and export growth, economists this week slashed their fourth-quarter growth estimates by as much a full percentage point to as low as a 0.4 per cent annual rate. The economy grew at a 2 per cent rate in the third quarter of last year.

The Labor Department's closely monitored jobs report, which will be released on Friday 1330 GMT, could offer a brief respite to global stock markets after heavy selling this week sparked by signs of slowing growth in China.

While labor market resilience would favor another interest rate hike from the Federal Reserve in March, economists say financial market turmoil and concerns among policymakers over low inflation suggest the U.S. central bank may stay on the sidelines a bit longer.

The Fed in December raised overnight interest rates by a quarter per cent to between 0.25 and 0.50 per cent, the first increase in nearly a decade, and a subsequent move at its next meeting this month was already seen as off the table, according to Reuters. - Idrak


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US job market healthy despite slowing economy | 24 News | The financial express