Back On Track: US recovery leaving EU, Japan behind

A sharp fall in the unemployment rate and a fresh record for stocks show the US economy pulling away from its peers.

A sharp fall in the unemployment rate Friday and a fresh all-time record for stocks show the US economy pulling away from its peers, gaining ground while Europe and Japan remain stagnant.

The Federal Reserve’s easy-money policy and the government’s modest stimulus spending appear to be paying off, distancing the country from the depths of recession while harsh austerity programmes appear to be holding Europe back. But the US still faces headwinds, especially of its own making, after opposition Republicans forced the White House to swallow deep spending cuts that could take the wind out of growth. And the stagnant level of long-term unemployment seen in the labour data is one of a number of frailties that still dog the country. The unemployment rate fell to 7.7% from 7.9% a month earlier, on the back of a net 236,000 jobs added during the month. In comparison, unemployment in the eurozone continued to mount, hitting a record 11.9% in January.

Published in The Express Tribune, March 10^th, 2013.

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