The Week’s Global Economic Events: The Health of the US Economy

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In here, we take a look at global economic updates or interesting key developments that investors can take note of. This week brings me to the US’s unemployment figures and what it means for the country’s economy.

US jobless rate at a 6 year low

3 July 2014 marked a milestone for the US economy as figures from the country’s Labor Department revealed that the US’s unemployment rate has fallen to 6.1%. There is reason to rejoice as this is the lowest the unemployment rate has been in the past 6 years after the Great Financial Crisis started in earnest in 2008.

In addition, the US jobs report also revealed that the US economy had added 288,000 jobs in June, higher than previously estimated; according to a Bloomberg survey of economists, the average forecast for June was for an addition of only 215,000 jobs.

There’s further good news for the US economy: The number of workers who have been unemployed for the long-term has dropped to 3.1 million, indicating that the probability of success in them finding work is higher now.

After a slump in the first quarter 2014, it seems that big companies and other multi-national corporations in the US are adding staff in a bid to expand their business.

Foolish Bottom Line

In short, the recent flow of data all point towards a steady improvement in the US economy. As a result, positive sentiment helped power the Dow Jones Industrial Average (one of the US’s oldest share market indexes) to more than 17,000 points for the first time ever last week although the index has now retraced its steps a little and sits at 16,907 currently.

Local investors who are interested to mirror the performance of the Dow can do it through the following exchange-traded fund: The Lyxor ETF Dow Jones Industrial Average (SGX: JC6).

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor James Yeo doesn’t own shares in any companies mentioned.