According to statements from President Obama’s team of economic advisors, the American economy is recovering slowly but steadily. Last month recorded a moderate rise in employment, and senior advisers to the President said that real progress was being made for bringing down the current unemployment rate, which stands at 9.7 percent. Around 162,000 new jobs were created in the month of March.
Lawrence Summers, director of the White House National Economic Council spoke at length on CNN’s State of the Union program about how the increase in jobs was good new even though it did not necessarily mean that there was a significant improvement. Summers said that though the trend has changed, it is still a long way ahead for the economy.
Out of the 162,000 new jobs, a large percentage came from the government’s temporary census workers. The private sector recorded 123,000 new jobs, the highest since 2007. Though the numbers are positive, they reflect a slow growth and show that the economy has a long way to go to restore the 8.4 million jobs lost during the recession. Presently, an estimated 11 million people depend on unemployment benefits.
Cristina Romer, chair of the Council of Economic Advisers, discussed the current employment scenario on NBC’s Meet the Press program. She said that she expected to see a continued recovery in the job market. However, she cited lack of credit availability as a major reason for slower recovery. When smaller businesses find it hard to get business loans, it directly affects their hiring plans.
Thanks to the fiscal stimulus legislation, small business lending has picked up. Romer mentioned that a $30 billion small business lending program is among the proposals pending in Congress. The Hire Act contains a provision for tax incentives for hiring. Many companies have started hiring temporary workers, indicating that there is an improvement in confidence. She also spoke of Obama’s plans to invest in clean energy as a means of boosting economic growth and creating jobs.
Although there are some positive signs as far as employment is concerned, the economy still looks quite fragile. The effect of the stimulus packages introduced in the last two years would begin to wane soon. There have also been some reports recently that the housing market could see another decline in prices. If that happens, and investors start losing confidence again, things could turn bad very quickly.
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