Money Matters - Simplified

US unemployment rate falls to 9.1% in July

A report by the Labor Department shows that jobless rate has fallen slightly in July and the more than expected jobs were added during this period.

Jobs created in July
The report revealed that 117,000 jobs were added in the month of July by the employers.

The jobs generated were spread across different sectors. While manufacturing companies added 24,000 jobs, retail sector created 26,000 jobs.

Hotels and restaurants provided 17,000 jobs as the health care sector created 31,000 jobs in July.

The number of jobs added were above the expectations of the analysts and provided some relief to the investors. Several analysts had estimated that around 90,000 jobs will be added in July.

Nearly 250,000 jobs are required to be created each month to bring down the unemployed rate quickly, but the economists are not expecting much this year.

Chief Economist at Mesirow Financial, Diane Swonk, said, “Nothing to pop Champagne corks over but a much-needed shot in the arm for confidence at a time when we have so little.”

The hourly wages for workers also saw an increase, the highest in a month since 2008. More jobs coupled with better pay mean that people will have more to spend which will eventually help the economy grow.

Investors welcome report
The investors received the news about a dip in unemployment positively, but the focus was on Europe where Italy and Spain are trying to escape a financial crisis.

Later in the day, markets across the world received the news that Italy has promised to make amendments in its Constitution for ironing out fiscal imbalances.

All the gains that come after a week when the government was on the verge of a default reassured came as a sigh of relief to economits.

Nearly 250,000 jobs are required to be created each month to bring down the unemployed rate quickly, but the economists are not expecting much this year.

Ian Shepherdson, an economist with the High Frequency Economics, noted, “These numbers are not great but they are a long way from recession territory.”