The unemployment rate finally declined beneath the 7% threshold and reached 6.7% in December, according to the Labor Department’s Monthly Employment Report. However, the number of new jobs created was less than a third of the 241,000 jobs created in November. Only 74,000 new jobs were generated in the economy during December. Nevertheless, all other economic indicators are still very positive and broadly spread across the economy. This suggests the December employment report should be viewed as an aberration rather than a trend.
On Friday the Labor Department will release its latest report on employment and unemployment during the month of December. Most economic forecasters expect an okay report, but not one that is significantly better than the report in November. In fact, some are suggesting the unemployment rate may increase even from 7.0% to 7.1%, and the number of new jobs created might decline below 200,000. In contrast, I believe there’s every reason to be more optimistic than the average economic forecaster is. Based on the strong performance of the economy over the last several months, it is reasonable to expect more new jobs were created in December than the number in November (203,000), and the unemployment rate may fall below 7% for the first time in years. Why? Because virtually all important indicators, with the exception of automobile and truck sales, increased significantly over the last reporting period.
What’s new about the current phase of the economic recovery is all sectors are moving forward in sync. It’s like an automobile that is firing on all cylinders, rather than a few. This is not happened in the four and one-half years since the great recession ended.
The US House of Representatives appears to have shifted tactics from fighting over the debt ceiling to defund Obamacare, to fighting over the continuing resolution, i.e. funding government operations. Either way, it is playing a dangerous game of political chicken with the economy.
There are three reasons why a perfect storm for a new recession is developing rapidly. The House of Representative’s latest vote, to fund the government but de-fund Obamacare may be the ingredient that tips the economy over.
In South Africa, black unemployment was 29.1% in 2012 and white unemployment was 6.1%. In January 2013, black unemployment in the US was 13.8% and white unemployment 7.0%. Comprehensive solutions are needed.
Government opportunities prompted an increase in minority business startups and lead to the formation of more successful companies; minorities are also more dependent on government opportunities.
Inequality for blacks and Latinos has worsened over time. Whether measured by wealth, income or jobs, the picture is dismal. Blacks and Latinos make up 27% of the workforce and 40% of all unemployed workers.
Two major challenges that are facing minority businesses are building greater capacity and improving management efficiency. Corporate mentor protege programs can assist in this regard.