The Dow Jones Industrial Average pierced through the 14,000 mark today, as the department of Labor released its jobs report for the month of December. In addition, all ten industry groups in the S&P 500 advanced sharply.
As the National White House Press Examiner reported last week, the stock market rally since the election in 2008 of President Barack Obama has continued on an upward trajectory, prompting some to call this the "Obama stock market rally." The DJIA is fast approaching its all-time high of 14,164.53 achieved on Oct. 9, 2007. On inauguration day on Jan. 20, 2009, the DJIA was 7,949.09. It bottomed on March 9, 2009 at 6,547.05 which at the time was its lowest level since 1997.
Why has the stock market risen and the "Obama stock market rally" continued?
According to Bloomberg, the Labor Department figures showed payrolls rose 157,000 in December, following a revised 196,000 advance in the prior month of November. Jobs surged in November to 247,000. The jobless rate increased to 7.9 percent from 7.8 percent. Other reports showed manufacturing in the U.S. expanded more than forecast in January, reaching a nine-month high, while confidence among American households unexpectedly rose.
One analyst told Bloomberg that two very positive trends in the economy are in manufacturing and real estate. Those positive trends translate into jobs.
Alan B. Krueger, Chairman of the Council of Economic Advisers, issued a statement today on the employment situation in January and commented on the department of Labor report.
"While more work remains to be done, today’s employment report provides further evidence that the U.S. economy is continuing to heal from the wounds inflicted by the worst downturn since the Great Depression," said Alan B. Krueger.
He pointed out that it is "critical that we pursue the policies needed to build an economy that works for the middle class as we continue to dig our way out of the deep hole that was caused by the severe recession that began in December 2007." He also urged "Congress to move toward a sustainable Federal budget in a responsible way that balances revenue and spending, and replaces the sequester, while making critical investments in the economy that promote growth and job creation and protect our most vulnerable citizens."
The Bureau of Labor Statistics shows that the economy has added private sector jobs for an astounding 35 straight months. During that period, a total of 6.1 million jobs have been added to the economy. In 2012 alone, private business has added 2.2 million payroll jobs.
According to the Department of Labor survey, January employment rose notably in retail trade (+32,600), construction (+28,000), health care and social assistance (+27,600), professional and business services (+25,000), and restaurants and bars (+17,100). Manufacturing gained 4,000 jobs in January. The manufacturing sector has added about a half-million jobs over the last three years, the most for any such period since 1996.
Also of note, in the last two years the construction sector has gained nearly 300,000 jobs, with one-third of that gain occurring in the last four months.
One of the negative aspects of the Department of Labor survey is the marked decrease in "government employment." The "government" lost 9,000 jobs in January, including 5,000 federal government jobs, and 4,700 jobs in local government education. The local government education sector has now lost 339,400 jobs since its recent peak in November 2009.
In the housing market, new-home sales for all of 2012 hit 367,000, the highest level since 2009. The rate of new-home sales remains far below a bubble peak of almost 1.4 million in 2005, according to Marketwatch.com. Sales of existing homes while ticking down slightly in December, the total for 2012 hit the highest level in five years, according to data released recently by the National Association of Realtors.
Politically, this economic upturn solidifies President Barack Obama's strength in dealing with the United States Congress in passing economic legislation and passing a budget that can be passed in both houses.
The economic upturn also continues to add to President Obama's legacy as one of the great Presidents in American history as he took a quickly depressing economy and turned it into a path of growth.
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John is the author of an award-winning book, the 2010 Winner of the USA National Best Book award for African American studies, published by The Elevator Group, Mr. and Mrs. Grassroots. Also available an eBook on Amazon. John is also a member of the Society of Midland Authors and is a book reviewer of political books for the New York Journal of Books . John has volunteered for many political campaigns.