On the strength of positive employment data for September, stock markets rally
WASHINGTON – On Friday, the U.S. Department of Labor released its employment data for September, which shows that there was a net increase of 57,000 jobs in the economy, holding the unemployment rate steady at 6.1%.
Wall Street responded immediately, as stock traders went on a buying spree in early morning trading, sending the Dow up more than 121 points, or 1.3%, as of 10:00 a.m. The Nasdaq and S&P 500 were also up 2% and 1.4%, respectively, and marked the third straight day of gains on Wall Street.
"This is further confirmation of what we already know: tax cuts work every time they\’re tried to effect economic growth," said taxpayer advocate Grover Norquist, President of Washington D.C.-based Americans for Tax Reform. "As a result of tax cuts that put more money in people\’s pockets, consumer spending came around first and now the job market is following, which is always the way it happens during economic recoveries. Once businesses are satisfied that consumer confidence and spending are stable, as well as their profits, then they will begin hiring workers."
Manufacturing has continued to take it on the chin, but less so than in previous months, losing only 29,000 jobs in September. The service sector added 66,000 jobs last month while construction employment was up by 14,000 new jobs. This is the first time in the last eight months that total payroll employment has increased, suggesting that the weak job market is turning around.
Of additional note, job losses in August, initially reported at 93,000, were revised to only 41,000, the Labor Department said, signaling that the job market was improving before September.
"One of the nice things about tax cuts is that the logic behind them becomes quickly self-evident, as consumers and stock traders respond rationally to the financial incentives that tax cuts provide," continued Norquist. "Nicer still, however, is how they reveal the convictions and aspirations of liberals, who are well represented among the 10 Democrat presidential dwarves. The Democrats can see the positive impact of cutting taxes, of less government intervention, and yet they deny it all and talk of repealing the tax cuts and initiating new government programs. Those prescriptions speak for themselves and say volumes about the Democrats and liberals in general."