The United States recovery is one of the factors the world is looking to as it assesses the future of the global economy. As the debt crisis in the Eurozone continues to wane on the fears of investors and China faces a slowing economy, the world is starting to become concerned that the global recovery may be fading. Continued support from the United States economy would spur economic activity in the rest of the world.
Global investors were a bit concerned on Friday when they saw that the United States missed job growth predictions. After receiving estimates from the ADP and observing continued drops in first time unemployment claims through the month of March, economists predicted that the United States created about 250,000 nonfarm payroll positions. The official number turned out to be less than half of that.
The outlook for job creation in the United States continues to have a major impact on the economy in the UK as well. The Register pointed out that these were some major concerns, as the United States continues to be a buyer for many products manufactured on the Island and other nations throughout the world.
More skepticism has been raised about how the U.S. Bureau of Labor Statistics (BLS) does its calculations. The agency has been criticized for its use of seasonal adjustments as a leading indicator of actual job growth. Critics point out that a warmer than normal spring may be responsible for the reportedly higher number of jobs between December and February.
The United States continues to face some challenges that could be a setback for its recovery, such as rising gas prices. The threats to the economies of the United States, Germany, France, the United Kingdom and China are some of the biggest concerns for the global economy.
The recent jobs report may encourage the Federal Reserve to implement a new stimulus plan. However, skeptics are concerned that additional easing will only devalue the dollar further, which will only increase gas prices and cause other problems that could lead to a serious problem for the global economy.
The future prospects of job growth and other economic indicators will be a big factor in the political environment during the election in November. More importantly, it will impact the United States’s ability to assist the IMF, who has requested additional aid in helping with the recovery efforts in Europe.