Improved unemployment rate added stability in US economy

The unemployment rate has certainly shown an improvement of since September 2009. Because of these improvements in unemployment rate, the US economy is getting on good shape footing with fair prospects of a stable growth path in the future. If we take a closer look at the 5.5% unemployment rate, however we see the situation is anything but cheerful.

In early April, the Bureau of Labor Statistics (BLS) reported a 126,000 increase in nonfarm jobs and an unemployment rate of 5.5%. Doesn't this mean the improvement in U.S. economy? The weak job numbers suggest that there is best opportunity for skilled human resource and that wages are stagnant.

In combining lower wages and shorter hours, consumers' disposable income is constrained. Keep in mind that two-thirds of our country's gross domestic product (GDP) comes from consumer consumption. Without an increase in consumer disposable income, it is unlikely that the consumption portion of the GDP will grow.

Last but not least, the March job report also made revisions to January and February's employment numbers. In total, the number of jobs gained in the first two months of the year was actually 69,000 less than what was published in previous reports.

The USD made a comeback attempt today, which so far looks successful in pairs like AUDUSD and USDJPY, while the greenback still has plenty more wood to chop before it can turn the tide against the likes of the EUR or GBP.