Confident of recovery\’s staying power, businesses add jobs to boost output and inventories
WASHINGTON – Initial jobless claims fell by 15,000 in the week ended November 15, according to a Labor Department (DOL) report issued Thursday. Even more encouraging was the decline in the four-week moving average to its lowest level since before the 2001 recession.
As business profits are climbing and inventories remain low ahead of the Christmas shopping, expect significant job growth in November as businesses hire new workers to keep output up and stocks shelved. This would come on the heels of a 126,000 net job gain in October and an upwardly revised 125,000 gain in September.
"By reducing capital gains taxes and accelerating depreciation schedules, businesses have been able to increase output and reduce costs, boosting profit margins," said taxpayer advocate Grover Norquist, President of ATR in Washington D.C. "Falling jobless claims over the last couple months and net job gains over the last three indicate that businesses are using those profits to hire new workers to further boost output and rebuild their inventories."
The DOL survey shows initial jobless claims filed with state unemployment agencies fell to 355,000 last week, a drop of 15,000 from the prior week\’s total and the seventh consecutive week that claims have been below 400,000. Economists consider weekly jobless claims below 400,000 to indicate a strengthening labor market.
This decline brought the four-week moving average, which smoothes out weekly fluctuations to provide a more accurate assessment of the job market, to 367,250, its lowest level since 365,500 in the week ended February 24, 2001.
"More Americans are finding jobs and are subject to lower income tax rates because of President Bush\’s tax cuts," continued Norquist. "Americans will be more productive and businesses will be able to produce more goods and services at lower costs. In turn, this will boost profits and encourage further investment in capital and labor, meaning more jobs, more income, and more prosperity."