Unemployment rates, are we getting better?

New jobs are created in a rate of ninety five thousand a month but this rate is just enough to prevent the unemployment rate from going up. So are we at a stable state? Not really! new jobs pays slightly above minimum wage, most of them are entry level positions in food preparation or for temp employees. On the other side, people are getting fired from a higher paying professions like construction.

Unemployment Effects on the Elections

Gist: As the elections are nearing, many people who are unemployed are much less likely to get out and vote. As a result of this economic recession, the unemployed is a large group of people: 50,000 voters just in Ohio who are part of the working class. With the working class typically voting democrat, this is likely to effect the democrats at the polls.

(I would think that if you are unemployed you would be more motivated to vote.)

Labor Market Turning Around?

Gist: The average number of new unemployment claims have been on the decline since mid-August, where it peaked.

Nigel Gault, Group Managing Director of the North American Macroeconomics Service of Global Insight, says that economists want a much larger decline in new unemployment claims to declare this as the economy recovering. Companies are still adding jobs slowly.

James Galbraith, American economist, says the economy lost over 8 million jobs in this recession. This is more than twice the number lost in the previous two recessions. The rate of job creation will have to increase dramatically to get us out of that hole.

With companies pursuing increased productivity so much it does not seem likely that they are looking to hire a lot of people.

(Why are companies so hesitant to hire more people? Labor too expensive? Not enough sales? What is the real cause of new unemployment claims?)

Gist: 67000 jobs added last month but unemployment percentage went up to 9.1%. Why are we so worried about those 9.1% and why is unemployment percentage rising?

According to Richard Moran a quarter of working adults were unemployed in one point during the recession and 9.1% are unemployed now so about one third of the US work force was affected by the recession.
The reason the unemployment number is going up is due to the fact that people are returning to look for jobs now that the job market is awaking. Up until now those people were under the radar.

The Real Issue in the Recession

Gist: Job loss the story of this recession. David Leonhardt, an economics journalist with the New York Times says that layoffs are the symbol of economic struggles but, they are not the main problem.

On the first Friday of every month the Labor Department releases a report with the net jobs lost and gained for the past month. This number can be very misleading. For example, last month the economy created 4 million new jobs and lost 4.1 million old jobs with a net loss of 100,000 jobs. The firing rate should not be as big of a concern as the hiring rate. In this recession, the rate of hiring has fallen much greater than the rate of firing has increased. The economy needs to create jobs. The government can help. However, they have cut back funding in education and science and research. Corporate investments are not creating much either.

Interview w/ John Challenger

Gist:  According to outplacement firm Challenger, Gray, and Christmas, the job market in the US is recovering faster than in the 1991 and 2001 recessions.  In 2001, it took 21 months before the economy began to add jobs vs. 6 months in 2010.

Challenger:

1) We are averaging 481,000 jobless claims, which is 85,000 less than we saw one year ago.
(Red Flag:  look at  long-term unemployment and how this skews this number).
2) The export economy is crucial--particularly supplying emerging and growing countries.
3) Health care will be a very strong industry
(Red Flag:  is this a spiral?) 

• Challenger, Gray & Christmas' 2010 Labor Day Outlook (PDF)
• John Challenger's bio