Analysis #2: Strong October Jobs Growth Sends Another Mixed Signal on Economy

In the Wall Street Journal for November 3, 2007 there is an article by Sudeep Reddy on an increase in jobs during the month of October. There was a surprising surge in October payrolls that created a growth in the number of jobs available. Employers added 166,000 jobs during the eleventh month of the year which is the most in the past five months. With the surging availability of jobs and the increase in payroll, the unemployment rate remained unchanged which comes at a relief as in the past months a recession was expected.
As the number of jobs increased and payroll went up there was a conflict occuring that was happening behind the woodwork. When the report came about, it capped a week of conflicting signals. Earlier in the week, the government said the economy has grown at a 3.9% pace in the third quarter caused bhy increasing exports. Yet, consumer confidence fell, and a recent survey reveiled that there was a loss of momentum for manufacturers. This is huge conflict as one side has demand surging with an increase in exports, payroll, and jobs which can cause the manufacturers to increase their production. But on the other side of the conflict it is saying that demand is decreasing because of a fall in consumer confidence which is one of the factors of demand and when that decreases it takes demand along with it. Also there was a loss in the momentum of manufacturing which causes demand to decrease, causing quantity to go down resulting in the economy struggling. This conflict is a big worry for economists because of the misleading information that has been given to the public. With this information, people don't have a real grip on what's happening with the economy.
It has been found that even with this upbeat employment report, financial markets continue to anticipate another quarter point rate cut in december. With all this excitement about the increase in payroll, jobs, and no unemployment change there is still an expectation of the economy slowing down significantly. In the future, there is an expectation of consumer spending to fall creating demand to decrease and a weaker economy to come abroad. Even with all these expectations of the economy weakening, there is a feel of optimism coming from some economists but they feel that there needs to be an increase in more of the population aseeking for employment.