The unemployment rate dropped to 5.9 percent in November, the government reported last week. Although the economy added jobs for the fourth month in a row, the increase of 57,000 positions was much weaker than the 150,000 that private economists were forecasting.
| Year |
Unemployment Rate |
Quarter-4 2003 |
5.9% |
Quarter-1 2004 |
5.8% |
Quarter-2 2004 |
5.7% |
Quarter-3 2004 |
5.4% |
Quarter-4 2004 |
5.3% |
Quarter-1 2005 |
5.1% |
(Source: Conference Board Economic Forecast, 2003)
For the first time since March the unemployment rate is below 6 percent. Widespread evidence suggests this economic growth -- now at four consecutive months -- will continue throughout 2004 and probably 2005.
Companies are expected to step up hiring in 2004 after a year in which household spending boosted the economy more than business investment, according to a group of economists surveyed by the Wall Street Journal.
The 54 economists surveyed for 2004 economic-forecast report (Wall Street Journal, 2003) said they thought the unemployment rate could fall to 5.4 per cent by November 2004 from the current 5.9 per cent. Hiring fuelled by increasing corporate profits and economic growth could lead to as many as 1.5 million new jobs, the Journal said. The outlook for employment growth in 2004 and beyond has been downgraded from the previous forecast, but still presents a picture of economic recovery and job growth at a pace sufficient to gradually lower the unemployment rate from 5.9% to 5.1% by first quarter of 2005 (Wall Street Journal, 2003).
Key economic factors to follow are job growth, progress on the budget issues, and a national GDP rate of at least 3 to 4 percent for next year. In 2004, U.S. employment is expected to recoup the losses experienced over the previous three years, the report found. These losses totaled more than 2.3 million jobs.
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