“US unemployment rate hit a six-year low in September. The US unemployment rate dipped to 5.9% in September, a six-year low.”

 

“The rate fell from 6.1% in August and is the lowest recorded since July 2008”. “The US Federal Reserve has kept interest rates close to zero since the financial crisis in 2008.” In order to lower the US unemployment rate, the government should lower interest rates because that helps boost spending. As the US interest rates are low, people are not willing to save money in banks. Instead, they would like to spend more money on services and products. As a result, aggregate demands are higher because total expenditure increases. Higher demands lead to lower unemployment rate because we need more workers to produce more products to satisfy increasing demands, and then more people have salaries so that they spend more on consuming goods, which is a good flow that the government would like to see.

More jobs were created in the retail sector, health care, construction, leisure, and professional and business services. Fewer people are looking for jobs because they have got jobs they want. To some extent, high employment rate indicates that the economy is pretty good.

As the US interest rates are low, the currency exchange rates are also low. For example, US bonds can just be bought in U.S. dollars, and low interest rates make people do not want to buy US bonds. What’s more, people overseas will move towards higher yielding investments. As a result, the demands for U.S. dollars are lower and lower. Low demands for US dollars lead to low currency  exchange rates. Foreigners tend to buy more U.S. products because of lower price, and Americans will buy fewer imported products, which improves U.S. balance of trade.

Reference:

http://www.bbc.com/news /business-29479533