There is evidence that the markets and the U.S. economy are not listening to the fiscal policy noise emanating from Washington.
The creation by the private sector of 236,000 new jobs in February and the consequent fall in the unemployment rate to 7.7 percent, from 7.9 percent in January, indicate that the U.S. economic recovery is gaining traction. Also ignoring the impasse in Washington, last week, the Dow Jones industrial average reached its fourth nominal record in a week, closing at more than 14,000 last Friday.
In February, almost all sectors of economic activity, with the notable exception of the government, created new jobs. Even in construction, the weakest performer since the recession, job creation was vigorous, at 48,000 new jobs, also indicating a reactivation of the housing market.
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The positive fact is that average job creation has reached more than 200,000 for the last four months.
However, this is also the third consecutive year of vigorous job creation during the first half of the year. The concern is that in the previous two years this was followed by a slowdown during the second half of both years, indicating that the recovery lacked enough strength.
Worse still, this year signals from Washington on fiscal policy point toward more austerity, which, as described by Federal Reserve Chairman Ben Bernanke, can generate headwinds against the economic recovery.
Isaac Cohen is an international analyst and consultant, a commentator on economic and financial issues for CNN en Espaņol TV and radio, and a former director, UNECLAC Washington Office.
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