The US economic recovery is being held down by the unemployment rate. It’s such a problem that although the unemployment rate fell from 9.7 percent in May to 9.5 percent in June, more jobs were cut than were created. Jobless Americans dropping out of the labor force in droves skewed the stats within the jobs report. The stock market rose slightly on Friday morning. . The US economy has a lot of conflicting info. Even as job creation and consumer confidence fell, some manufacturing companies that want to hire can find workers with the kind of skills they need.
Consumer confidence, unemployment, and every little thing else
The unemployment rate reverberates throughout the U.S. economy. An uncertain employment picture wreaks havoc on consumer confidence, which went down a lot in June. The decline in consumer confidence led to a decline in auto sales, and pushed pending home sales off a cliff as tax credits for home buyers expired. Consumer spending makes up 70 percent of the U.S. economy, and disposable income is just a memory for millions of jobless workers.
The unemployment rate and why it dropped:
The unemployment rate reached its lowest point since July 2009. But as outlined by the Wall Street Journal, the decline wasn’t due to improvement in the labor market. A loss of 125,000 jobs should have increased June’s unemployment rate. But 652,000 people gave up looking for a job — the sharpest one-month decline in 15 years in the Labor Department’s survey. Some may be choosing other opportunities like school. . 1 million individuals stopped looking for work in the last 2 months.
New jobs a mismatch for many unemployed workers
The unemployment rate remains stubbornly high because individuals are still applying for the jobs. The New York Times reports that the problem is a mismatch between the kind of skilled workers needed and the ranks of the unemployed. During the recession, domestic manufacturers accelerated the long-term move toward more automation, laying off their workers that weren’t very skilled and replacing them with cheaper labor abroad. Now these companies need to hire individuals who can operate really new and hard computerized machinery, follow complex blueprints and demonstrate higher math skills than old-school assembly line workers.
The jobs report with a silver lining?
One must dig deep to discover some positives about the latest jobs report. As outlined by the Washington Post, Friday’s jobs report could mean that the economic recovery that started last year has lost momentum, but the numbers aren’t so bad as to suggest the nation is heading into a double-dip recession. The numbers, although weak, show just how far the U.S. economy has fallen. The job growth number, for example, is a decline from stronger levels in March and April, but the June job creation number is better than any month out of the past 31, other than the last two.
Discover more details here:
New York Times
nytimes.com/2010/07/02/business/economy/02manufacturing.html?_r=1&ref=us
Wall Street Journal
blogs.wsj.com/economics/2010/07/02/why-did-the-unemployment-rate-drop-2/
Washington Post
washingtonpost.com/wp-dyn/content/article/2010/07/02/AR2010070202004.html?hpid=topnews
