In Jobless Rate Dip, a Partial Picture

Discussion in 'Politics' started by Ringel05, Aug 7, 2009.

  1. Ringel05
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    Ringel05 Diamond Member

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    This is from the Washington Post and before you slam me about my source the Washington Post is considered by many to be a "Liberal Rag". In truth I've actually watched them over the years move from being a "liberal Rag" to being much more fairly balanced.

    Unemployment Figure Sparks Recovery Hopes; Other Data Show Sector Still Ailing

    The new jobless rate came as 422,000 people essentially gave up the search for work, not because of more jobs. (By Don Ryan -- Associated Press)

    Unemployment dipped in July for the first time in 15 months, but the jobs data released Friday also brought into focus the limits of the budding economic recovery.

    The new numbers raised hopes that the recession could be nearing an end. The unemployment rate fell to 9.4 percent, from 9.5 percent in June, and employers slashed 247,000 jobs, the slowest rate of decline in nearly a year.

    For all the optimism in Washington and on Wall Street -- President Obama said the economy is "pointed in the right direction," and the stock market rose 1.3 percent -- some details in the report show that the labor market remains weak. The stabilization in the economy is not rippling through to ordinary American workers. Economists generally expect the unemployment rate to resume its rise in the coming months, ultimately reaching or surpassing 10 percent.

    The July decline in the jobless rate came about not because more people had jobs, but because 422,000 people removed themselves from the labor force, essentially giving up the search for work. The number of long-term unemployed people -- those who have been out of a job but looking for more than 26 weeks -- rose by another 584,000.

    "If we don't see temp jobs go positive by September or October, in my mind, that would indicate we've got a longer way to go," said Roy G. Krause, chief executive of Spherion, a large employment services firm. His own company saw modest growth in demand for workers in the second quarter, he said, as "some employers have cut back a little bit too much and therefore they're starting to add a few people."

    The ongoing weakness in the job market is the key factor leaning against a robust recovery. The unemployment rate almost always lags at the end of recessions -- sometimes by long periods of time -- and many economists expect the unemployment rate to resume rising in the months ahead.
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    That is because as companies stop laying off workers in massive numbers, moderating the rate of job losses, those who have given up looking for work may re-enter the labor force -- a major risk to an otherwise improving outlook.

    "We're still headed pretty quickly to 10 percent unemployment," said Lawrence Mishel, president of the Economic Policy Institute, a liberal-leaning think tank. "Unemployment will be rising for the next year or more."

    And while the rate of job loss in July was slower than economists forecast, it still represents what is, by conventional measures, a very rapid contraction. Employers need to create around 150,000 jobs a month just to keep up with population growth, so it would take a major reversal for conditions to improve.
     
    Last edited: Aug 8, 2009
  2. oreo
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    oreo Gold Member Supporting Member

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    It's a mixed bag of nuts that's for certain.

    But where I live in Colorado we are starting to see signs of an improving economy. We had one high tech place move into our area that will be hiring 600 people--Good news for so many here out of work.

    It's really hard for me to tell because I live more in a tourist area--the mountains--in which people who live in hotter areas like to come to vacation in the summer months. One thing for certain there are a lot more people up here this summer than last summer when gas was at $4.00 per gallon.

    Like in many other recessions you will see parts of the country recover much more quickly than others. I expect this is going to be one of those. Unemployment in Michigan is at 14%--& California is at 10% & rising--because of the state lay-offs since they are basically bankrupt.

    The fall & winter months will be the tale. Summer months are typically the busiest months of the year.

    The report is right as the numbers are just on new unemployment filings--not how many people just gave up looking for jobs that are still unemployed.
     
  3. Ringel05
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    Ringel05 Diamond Member

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    Good News, my parents and younger brother live in the Springs. I'm glad things are picking up for you guys. I left there in 1977 because at the time we had PHDs working in 7-11s.
     
  4. garyd
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    garyd Senior Member

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    I hate to bust anyone's bubble but all this shows is that we've come to the end of the extra bodies companies always put on when things are going well. We are going to catch a break for a little bit and then as cap and trade becomes law (if it becomes law) the next round of cuts will begin and this time they will be cutting bone and muscle because the fat is already gone.
     

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