November 7, 2003 | WebMemo on Taxes
Chart 1 shows more than 1 million jobs have been added over the past year. (click on graph to see larger version)
Chart 2 shows the changes in specific employment categories: manufacturing, service, and government. (click on graph to see larger version)
The announcement by the Bureau of Labor Statistics that employment has grown by 126,000 in October and by nearly as much in September marks the third month of improvement in the employment survey. Particularly noteworthy were employment gains in the service sector of 143,000. In related good news, the unemployment rate fell slightly to 6.0 percent in October from September's 6.1 percent.
What's important about these latest figures is their signal that the economy is well along in its recovery, and it's a strong recovery. Job growth is often the last patch in the economic recovery quilt.
Certainly many factors are involved, but critics cannot ignore the fact that the Bush tax cuts are working. They have provided a foundation for bringing the recovery full swing by providing incentives for businesses to expand and invest.
Consumer spending is important and has done much to sustain the economy throughout the recovery. However, the missing link to stronger employment growth has been a robust recovery in investment, which traditionally fuels increases in jobs and wages.
Tax relief has lowered the cost of capital, made existing enterprises more profitable and investment and expansion more attractive. As the economy continues to grow and expand, stronger job performance building on today's news will undoubtedly follow. To ensure the strongest growth Congress should make these tax cuts permanent.