On the economic fron, unemployment rose from 9.7% to 9.9% as many people re-entered the job market. When reading unemployment reports in the press, keep in mind there are two employment reports. One report is called the Current Population Survey (CPS), which is also referred to as the survey of households. This is a phone survey of 60,000 households nationwide conducted each month. The other report is the payroll report, compiled from data gathered from payrolls nationwide. Not all the payroll information is available in a timely manner each month, which is why the unemployment numbers are sometimes revised up or down. The age groupings of the two reports are different. The payroll survey includes teen age employment, starting at the age of 16. The household survey starts at age 18. Due to these differences and the methodology used in the collection of data, the two reports will occasionally have different unemployment rates. Most press articles cite the payroll report.
The Bureau of Labor Statistics (BLS) reported the economy added 230,000 jobs in March, much more than the 162,000 jobs originally forecast. It revised figures in February to show that 39,000 jobs were added to the economy. I predict that as the economy improves and more workers re-enter the market in their search for a job in the coming months, the unemployment rate will remain in the realm of 9.8% to 10% or possibly higher.
As reported in the May 8 Wall Street Journal, the rise in unemployment from 9.7% to 9.9% was due in large part to the surge of some 805,000 into the labor force, as once-discouraged workers got back into the game as they perceive there may be signs of a stronger jobs market. However, many economists predict we will hover around 10% for at least a year before things really begin to turn around. With current economic and especially political conditions, employers, especially small employers, are not eager to start hiring. Small businesses are what have led America out of every recession in the past.
The good news is the April job growth of 290,000 was fairly widespread, with gains in manufacturing, professional and business services, health care, and leisure and hospitality. Nonfarm employment has risen by 573,000 since December, with 483,000 jobs added in the private sector. Manufacturing continued to add jobs in April (44,000). Employment in this industry has increased by 101,000 since December. Three industries--fabricated metal products, machinery, and primary metals--have accounted for more than half of factory job gains so far this year.
Federal government employment rose in April, reflecting the hiring of 66,000 temporary workers for Census 2010. Employment in state and local governments was essentially unchanged, which is a reflection of the financial crisis many municipalities and states face due to falling tax revenues. There is always a lag between improving employment and tax collection.
But there are some concerns. The overall jobless rate, including people who have stopped looking, jumped to 17.1%, which is the highest rate this year. More disturbing, the share of those out of work for 27 weeks or more reached another record of 45.9%. This means that some 6.7 million Americans have spent more than half a year without maintaining the skills and contacts they will need to compete across a lifetime of work.
I agree with The Wall Street Journal‘s attributing some of the unemployment to the many expansions of the jobless insurance that Democrats insist on passing, thus increasing the incentive for long-term jobless people to hold out for a better-paying job that may take much longer to arrive, if it arrives at all. This is a false and very expensive compassion that hurts everyone.
And final good news, the U.S. manufacturing sector added an estimated 44,000 jobs during April, the largest monthly gain in nearly 12 years! More than 100,000 new manufacturing jobs have been added during the past four months alone.
The bottom line is there are a lot of conflicting currents currently in the economy. While things are improving, the improvements are anemic at best. But at least we are now off the floor of this recession and starting to move forward!
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