A second consecutive month of job gains has put the American economy back on the fast track for growth and prosperity.
The most recent jobs report from the U.S. Bureau of Labor released on Friday, Aug. 5, indicated that the total non-farm payroll employment increased by 255,000 in July 2016 and the unemployment rate remained below 5%, marking a third straight month at full employment.
Meanwhile, the labor force participation rate remained unchanged at 62.8%.
Among the industries that experienced the biggest increases were professional and business services, which added 70,000 jobs in July and more than half a million jobs total over the last year. Further, employment in financial activities rose by 18,000 in the last month and has increased by 162,000 over the year.
This is good news for the U.S. economy, but the current state of the global economy — especially in European markets — is bleaker. In fact, recent predictions indicate that the post-Brexit UK economy, a major player in the fintech space, is expected to shrink for the first time in four years.
Meanwhile, private sector employment in New York City increased by 98,500 (2.7%) to 3,784,200 in a year-to-year comparison, according to statistics from the New York State Department of Labor.
Educational and health services (46,100) accounted for nearly half of the employment increases.
However, the gloomy outlook of the global economy and uncertainty in the European Union is weighing down on American big banks ($10+ billion in assets).
According to the most recent Biz2Credit Small Business Lending Index, a monthly snapshot of loan approvals, approval rates at big banks decreased two-tenths of a percent to 23.2% in the New York metro area.
It was the first time in six months that this category of lenders experienced a decrease in the percent of funding requests they approved.
Additionally, a recent survey by the Federal Reserve suggested that domestic banks are tightening their standards on commercial and industrial loans.
Whenever there is turbulence in international markets, big banks tend to become more conservative in their lending practices.
Britain’s decision to leave the European Union and acts of terrorism in France, Germany and other countries make an impact, but it has not been dramatic as of yet. Many economists predicted gloom and doom following the Brexit, but for the most part, these international events have had minimal impact on small business lending at big banks in New York.
At the same time, lending approval rates at small banks (48.9%) and institutional lenders (62.8%) — credit funds, insurance companies, family funds, and other yield-hungry, non-bank financial institutions — improved over the last month in the New York metro area, which continues to do well.
Rates are still historically low, and small businesses that are currently profitable are able to get loans for expansion and working capital.
Despite international affairs, the U.S. economy is stable, and now is a very good time to secure capital for growth.
Rohit Arora is the CEO and co-founder of Biz2Credit.com, a leading online marketplace that connects entrepreneurs with small business loan options to meet their business financing needs. Rohit was named Crain’s NY Business “Entrepreneur of the Year 2011.”
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