Unemployment Rate Drops Below 6%
New job figures released on December 5, 2003 and other recent indicators show America's economy is gaining strength, and the President's jobs and growth plan is working. 57,000 new jobs were created in November and 328,000 jobs have been added over the last four months -- the most robust four-month job growth record in nearly three years. The unemployment rate has dropped to 5.9%. Initial claims for unemployment insurance are markedly lower than they were two months ago.
America's economy grew at 8.2% in the third quarter - the strongest rate in almost 20 years. Survey evidence on manufacturing orders shows the strongest picture in 20 years. Automobile sales rose in November, and home construction continues to expand.
With strong sales and improving profits, companies will be more likely to hire new workers in the days and months ahead. And because of the continuing effects of tax relief, workers will continue to keep more of what they earn in the future.
These signs are encouraging, but there is more work to be done. The President will not be satisfied until every American looking for work has found a job. The President has outlined a six-point plan for building on the success of his jobs and growth agenda to create even more job opportunities for America's workers.
Background on Recent Economic Indicators
The Economy is Gaining Strength Real GDP growth in the third quarter of 2003 was 8.2 percent at an annual rate, the best in nearly 20 years. The consensus of private forecasters is that growth will continue above the historical average (since 1960) of 3.3 percent for the next several quarters. Financial markets reflect this optimism. The value of U.S. stock markets has increased by more than $2 trillion since the beginning of the year--increasing the value of many workers' 401K plans and other investments.
Household Spending--A Source of Strength in Recent Years--Has Increased Even Further Since Early Summer Housing starts and permits in October were at their highest levels since the mid 1980s. Mortgage interest rates remain near historic lows. Retail sales (excluding autos) grew at an average 8.5 percent annual rate over the four months from July through October.
There Are Encouraging Signs for a Recovery in Business Spending Surveys show that orders are increasing rapidly for manufacturers. The Institute for Supply Management (ISM) survey's index of new orders in manufacturing was at 73.7, its highest level in 20 years. Non-manufacturers also continued to report solid new orders well above the level of 50 that indicates expansion. Shipments of durable goods have strengthened markedly since summer. Orders are now well ahead of shipments, suggesting further growth to come. Real business investment in equipment and software rose 18.4 percent at an annual rate in the third quarter, the fastest growth in five years. Productivity growth over the past four quarters is estimated to have been about 5.0 percent, about double the average rate from 1995-2000. Productivity growth since the fourth quarter of 2000 has been at the highest rate for a comparable period in 40 years. This has bolstered corporate profits and helped to keep inflation low.
Consumer Confidence and Business Confidence Surveys Show Increases Consumer confidence is rising. The Conference Board measure of Consumer Confidence jumped 10 points in November to its highest level in more than a year. Business executive confidence also rose in the third quarter to the highest level since 1992. Investor confidence is also surging. The UBS Index of Investor Optimism surged 24 points to a 20-month high in November.
More Work to Be Done -- The President's Six-Point Plan for the Economy
President Bush's economic agenda is already producing results, but more actions are needed to reinforce economic growth and create even more jobs for America's workers. President Bush has proposed six specific steps to create additional momentum to hire new workers. Making health care costs more affordable and predictable; Reducing the burden of lawsuits on our economy; Ensuring an affordable, reliable energy supply; Streamlining regulations and paperwork requirements; Opening new markets for American products; and Enabling families and businesses to plan for the future with confidence by making tax reductions permanent.