The unemployment rate is what is holding down the US economic recovery. It’s such a problem that even though the unemployment rate fell from 9.7 percent in May to 9.5 percent in June, more jobs had to be cut than were created. Jobless Americans dropping out of the labor force in droves skewed the stats in the jobs report. Friday morning, stock market numbers rose slightly. But soon after a decline in factory orders was reported at 10 a.m., the Dow Jones Industrial Average lost 32.5 points. A lot of conflicting information has been in the US economy. Even as job creation and consumer confidence fell, some manufacturing companies that want to hire can discover workers with the kind of skills they need.
Unemployment rate, consumer confidence and anything else
The unemployment rate effects the whole 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 many of the 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:
Since July 2009, the unemployment rate reached its lowest point. But according to the Wall Street Journal, the decline wasn’t due to improvement within the labor market. June’s unemployment rate should have increased with a 125,000 job loss. But 652,000 people gave up looking for a job – which happens to be the sharpest one-month decline in 15 years in the Labor Department’s survey. Other options like school could be being explored by some. Some are at the end of their unemployment benefits. Whatever the reason, over the past two months almost 1 million individuals stopped looking for work.
New jobs seem to be a mismatch for unemployed workers
The unemployment rate remains high because plenty of individuals are still applying for the jobs. It was reported by the New York Times the problem is a mismatch between the kind of skilled workers needed and also the ranks of the unemployed. Domestic manufacturers accelerated the long-term move toward more automation, laying off their lowest-skilled workers and replacing them with cheaper labor abroad. Now these companies need to hire people who can operate sophisticated computerized machinery, follow complex blueprints and demonstrate higher math skills than old-school assembly line workers.
A jobs report and silver lining?
You’ve to dig deep to discover good things within the last jobs report. According to the Washington Post, Friday’s jobs report could mean the economic recovery that started last year has lost momentum, but the numbers are not so bad as to suggest the nation is heading into a double-dip recession. The US economy is falling as outlined by the numbers. The job growth number, for example, is a decline from stronger levels in March and April, but the June job creation number of a mere 83,000 is better than any month out of the past 31, other than the last two.
More info accessible at these web sites:
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
