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Friday, May 07, 2004

U.S. payrolls rose at a rapid pace for a second month in a row, boosting expectations for an increase in interest rates. Job growth was widespread, with the manufacturing sector posting the biggest increase in nearly four years.

Nonfarm business payrolls grew by a net 288,000 jobs in April, raising the total to 1.1 million over the last eight months, the Labor Department said Friday. The government also reported 66,000 more jobs were created during March and February than initially estimated. The unemployment rate, meanwhile, dropped a tenth of a percentage point to 5.6% in April.

Economists had expected payrolls to grow by only 150,000 jobs and for the unemployment rate to remain stagnant, according to a survey by Dow Jones Newswires and CNBC.

Detractors of President Bush like to say that he has "cost us millions of jobs", an argument which doesn't hold up on an intellectual level. Executive officers of corporations do affect job growth within their firms. The executive office of the US does not.

However, fiscal policies do affect the economy; companies will hire more people if they can justify the hiring, and making labor affordable and cost effective is how that is accomplished. What has contributed most greatly to this? Tax cuts. Especially in the middle, where companies are taxed at the personal income tax rates.

I would like to see government policy go further by lowering corporate rates to be more competitive globally. Among major countries, only Japan (42%) is higher than the US. (40%). This makes it more cost effective for multinational companies to do business in other countries, instead of in the United States. Were a cut in this rate coupled with the White House's current policies, the economic effect would be enormous.


.: posted by Dave 9:00 AM

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