The Labor Department announced today that the economy is stronger than previously thought. In its annual benchmark revision covering the 12 month period that ended in March, the Labor Department said the US economy added 386,000 more jobs than it had initially estimated. These revisions are made by comparing its non-farm payroll data with information from a more complete database of unemployment insurance tax reports. The Labor Department performs this type of revision once a year, and its final report will be released in February.
Overall, the economy created 453,000 more jobs than were initially reported. That means the level of employment was actually 0.3% higher than what was previously believed. The estimate for government jobs was lowered by 65,000. The report also found 25,000 fewer manufacturing jobs were created.
The data suggests what Americans have been feeling as of late. Polling shows that Americans are growing more optimistic about the economy. That trend has lifted President Obama’s polling numbers as well. He has begun to pull away from Republican challenger Mitt Romney in almost all of the crucial swing states, and even nationally.
Barring a sharp rise in oil prices or further collapse in Europe, the economy should continue to grow over the next year. The housing sector is finally beginning to rebound, which is a big plus to the economy. Housing had long been a drag on economic activity.
If economic growth continues, the unemployment rate should begin to drop a bit faster. Employment is always a lagging indicator, as businesses only tend to hire once they think the coast is clear. In a shaky environment, hiring is not a good idea.