Higher unemployment hurts just about everyone in a consumer-driven economy, and the lack of jobs in the United States has been a challenge for just about everyone. Retail companies are most dependent on high employment rates and strong consumer purchasing power, which is why Wal-Mart (NYSE:WMT) and Costco (NYSE:COST) stand to benefit from sustained growth in U.S. jobs figures.
After four calamitous years for American workers, low unemployment has almost become a Shangri-La for economists and policymakers alike. The Labor Department recently released a report that showed a sudden drop in unemployment, from 9% to 8.6% in November. Since November is not typically a month that shows increased employment figures, and since the growth in employment was not driven by the public sector, there is cause for optimism.
Optimism, however, has become a rare commodity. The New York Times urges caution, pointing to the unresolved European debt crisis. Economists are surprised at the surge in American employment figures, considering the increasingly bleak outlook for Europe and signs that even the Chinese economy is slowing.