| News Story
The U.S. economy snapped a prolonged job slump in October when it produced 337,000 new jobs for American workers. A government report said it was the largest monthly increase since March, 2004. The report renews hopes that businesses may finally be hiring more aggressively after a year of cautious hiring decisions.
Some economists warn, however, that a sudden increase in job growth does not necessarily mean that hiring will continue at the same pace into the future. "This is the kind of job report you want to see at this stage of an economic recovery," said Jared Bernstein, an economist at the Economic Policy Institute in Washington. "But we've been here before. Whether this will be a persistent trend is hard to know."
The new employment report does come close to relieving president Bush of the Democratic charge that Mr. Bush will be the first president since Herbert Hover to preside over a net job loss during a four-year term. The new figures indicate that the economy has been adding an average of about 225,000 new jobs a month for the last three months. This figure is substantially above the 150,000 new jobs necessary to absorb the new workers who will enter the labor force.
Treasury Secretary John Snow said, "President Bush's tax relief combined with good monetary policy, the strength of our small-business sector, and our outstanding work force has led to a growing economy that is producing good jobs for American families."
Economists have been baffled for months about why strong consumer and government demand was not causing employers to hire more aggressively. Now, it appears that job gains are occurring across the board. With manufacturing employment still declining, employment grew strongly in the vast service sector that accounts for most employment in the U.S., with especially strong gains for health and education sector workers.
"We have been waiting for this for the better part of the last two or three quarters," said Bob Gay, a former economist at the Federal Reserve who is global strategist at Commerzbank Securities. The strong job growth will increase consumer's disposable income and contribute significantly to future economic growth.
(Updated January, 2005)