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US economy adds new jobs more than expected

in International Business

US economy adds new jobs more than expected

According to the new figures, US firms hired extra 163,000 workers in July, more than what economists had expected.

The number of jobs added is more than forecasted, and the highest monthly total since February.

The unemployment, however, went up from 8.2% to 8.3% last month, as more people joined the workforce but failed to find a job.

The economy seems to be continuing to add jobs, which will be quite a respite for Barack Obama whose reelection victory remains in the hands of the economic recovery.

Republican presidential candidate Mitt Romney has announced that his jobs plan would add 12 million new jobs by the end of his first term.

The U.S. is experiencing its longest period of high unemployment since the Great Depression.

The Fed introduced Operation Twist, in a bid to boost the economy. Operation Twist is a program where the Fed buys long term bonds and simultaneously buys short term bonds. The idea behind is that by purchasing long term bonds, the Fed can help drive prices up and yields down. Lowering long term yields would goose the economy by making loans less expensive for those looking to buy homes, purchase cards and finance projects.

The first phase of Operation Twist ran from September 2011 to June 2012, redeploying USD 400bn in Fed assets. The second will run from July 2012 through December 2012, encompassing a total of USD 267bn.

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