Us Unemployment Rate,sep. 2009
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A review on U.S Unemployment rate (September 2009) Nariman H. MBA student [email protected]
November 2009
Nariman H.,A review on U.S unemployment rate
Contents INTRODUCTION ....................................................................................................................... 3 CONCEPTS .............................................................................................................................. 4 Identifying Unemployment ................................................................................................... 4 Who is counted as Unemployed? ........................................................................................... 4 Is there only one definition of Unemployment? ....................................................................... 4 Problem statement .............................................................................................................. 5 LITERATURE REVIEW ................................................................................................................ 6 Employment and unemployment by sex and age ..................................................................... 6 Employment and unemployment by educational attainment .................................................... 8 Employment by class of worker/part-time status and occupation .............................................. 9 Average hourly earnings and average workweek ....................................................................10 US GOVERNMENT POLICY ........................................................................................................11 CONCLUSION .........................................................................................................................12 REFERENCES ..........................................................................................................................13
Page 2
Nariman H.,A review on U.S unemployment rate
INTRODUCTION This article discusses about unemployment, an important economical issue which has a huge impact on everything in the economy. To give more clear and tangible examples, it also explains the issue with the last unemployment report that has been published by Bureau of Labor Statistics of United States, BLS (September 2009). After several months in which the American economy flashed tentative signs of improvement, a sobering report on the national job market released for September 2009, amplified worries that a lengthy period of lean times lay ahead. The economy shed 263,000 jobs in September, and the unemployment rate edged up to 9.8 percent from 9.7 percent in August, according to the Labor Department’s monthly snapshot of the employment picture.
On first part it discusses on concepts. Next it goes to interpret and analyze the article with showing table and charts. On next part it gives some information about U.S Government policies in case of unemployment.
Page 3
Nariman H.,A review on U.S unemployment rate
CONCEPTS Identifying Unemployment The unemployment rate is the percentage of those who would like to work who do not have jobs. The unemployment rate is an imperfect measure of joblessness. Some people who call themselves unemployed may actually not want to work, and some people who would like to work have left the labor force after an unsuccessful search and therefore are not counted as unemployed.
Who is counted as Unemployed? Persons are classified as unemployed if they do not have a job, have actively looked for work in the prior 4 weeks, and are currently available for work. Actively looking for work may consist of any of the following activities:
Contacting An employer, an employment agency Sending out resumes or filling out applications Placing or answering advertisements Checking union or professional registers Some other means of active job search
Is there only one definition of Unemployment? There is only one official definition of unemployment, and that was discussed above. [6] However, some have argued that this measure is too restricted, and that it does not adequately capture the breadth of labor market problems. For this reason, economists at BLS and usually other national statistics offices all around the world develop a set of alternative measures of labor underutilization that included union members, work at home, work experiences, work life …etc. If laid-off workers who have settled for part-time work or have given up looking for new jobs are included, the unemployment rate will rise more than current rate. [1]
Page 4
Nariman H.,A review on U.S unemployment rate
Problem statement The unemployment rate rose to 9.8 percent in September as employers cut far more jobs than expected, evidence that the longest recession since the 1930s is still inflicting widespread pain. The Labor Department at the latest report for September 2009, said that the economy lost a net total of 263,000 jobs, up from a downwardly revised 201,000 in August. That's above Wall Street economists' expectations of 180,000 job losses, according to a survey by Thomson Reuters. [1], [2] More than a half-million unemployed people gave up looking for work last month. If laid-off workers who have settled for part-time work or have given up looking for new jobs are included, the unemployment rate rose to 17 percent, the highest on records dating from 1994. [3]
Figure 1.0 shows the monthly unemployment rate. Its source is Bureau of Labor Statistics website, Current Population Survey. Many analysts expect the economy grew at a healthy clip in the July-September quarter, technically ending the recession, they say if the economy were to grow at a 3 percent pace in the coming quarters, it would not be enough to quickly drive down the unemployment
Page 5
Nariman H.,A review on U.S unemployment rate
rate and it is likely to remain above 9 percent through the end of 2010 [5]. But few think the recovery will be strong enough to lower the jobless rate. Most economists expect the rate to top 10 percent and keep climbing. There are now six unemployed people for every job opening across the United States, and the odds against job seekers are clearly taking a psychological toll. [3]
LITERATURE REVIEW
Employment and unemployment by sex and age Table A-1 shows the Employment status of the civilian population by sex and age. In total status in this table, there is the unemployment rate 9.8 for Sep. 2009 versus 9.7 for Aug. 2009 and 6.0 for Sep. 2008. The civilian labor force participation rate declined by 0.3 percentage point in September to 65.2 percent. The employment-population ratio, at 58.8 percent, also declined over the month and has decreased by 3.9 percentage points since the recession began in December 2007. Also be viewed in case of Men and Women unemployment rate for 20 years and over, there is 7.8 percent for women in contrast of 10.3 for men. It means women position on work is more stable than men.
Page 6
Nariman H.,A review on U.S unemployment rate
Page 7
Nariman H.,A review on U.S unemployment rate
Employment and unemployment by educational attainment Table A-4 illustrates the Employment status of the civilian population 25 years and over by educational attainment through dividing population to four groups: Less than a high school diploma, High school graduates but no college, Some college or associate degree and Bachelor’s degree and higher . As the table shows, the highest unemployment rate in these four categories belongs to first group, less than a high school diploma with 15.0 percent. In contrast Bachelor’s degree and higher, has the lowest amount 4.9 percent that Includes persons with bachelors, master’s, professional and doctoral degrees. It also shows the unemployment rate for this category in year 2009 usually is less than 6 percent. It means in new situation, the economy needs more experts rather than simple workers and blue collars.
Page 8
Nariman H.,A review on U.S unemployment rate
Employment by class of worker/part-time status and occupation Both tables A-5 and A-10 give some information about Employed and unemployed persons by class of worker, part-time status and occupation. Construction jobs fell by 64,000, more than the 60,000 eliminated in August. And service sector companies cut 147,000 jobs, more than double the 69,000 in the previous month. Retailers lost 38,500 jobs, compared to less than 9,000 in August. [1], [8], [7] Temporary help agencies eliminated 1,700 jobs, down from the previous month, but still a sign of labor market weakness. Economists see temporary jobs as a leading indicator, as employers are likely to hire temporary workers before permanent ones. [1], [8], [7]
The uncertainty that surrounds the recovery has made employers reluctant to hire. The Business Roundtable, a group of CEOs from large corporations, said that only 13 percent of its members expect to increase hiring over the next six months. [5]
Page 9
Nariman H.,A review on U.S unemployment rate
As table A-10 shows, Construction and extraction occupations have the most percentage in the unemployment rate, 17.7 percent, while Management, business and financial operations, Service and Professional occupations have the lowest percentages with 5.2 percent. One question may be that why the sum of unemployment rates exceed 100 percent in Table A-10? In this table there are a lot of various fields that some of them have joint together.
Average hourly earnings and average workweek In September, the average workweek for production and nonsupervisory workers on private nonfarm payrolls edged down by 0.1 hour to 33.0 hours. Both the manufacturing workweek and factory overtime decreased by 0.1 hour over the month, to 39.8 and 2.8 hours, respectively. [6], [7] In September, average hourly earnings of production and nonsupervisory workers on private nonfarm payrolls edged up by 0.1 percent, to $18.67. Over the past 12 months, average hourly earnings have risen by 2.5 percent, while average weekly earnings have risen by only 0.7 percent [6]. It's because of declines in the average workweek and shows the Economy is going toward the part-time jobs in this period.
Page 10
Nariman H.,A review on U.S unemployment rate
US GOVERNMENT POLICY When workers are unemployed, they, their families, and the country as a whole lose. Workers and their families lose wages, and the country loses the goods or services that could have been produced. In addition, the purchasing power of these workers is lost, which can lead to unemployment for yet other workers. The endurance of hard times seems likely to increase pressure on the Obama administration and Congress to consider another dose of spending aimed at stimulating the economy, even as the government grapples with deficits projected by some economists to exceed $10 trillion over the next decade. There were a lot of discussions between the White House and Senate about their versions of the stimulus package. But the negotiations between the two chambers and the White House moved rapidly, and on Feb. 11 2009, a little more than 24 hours after the Senate vote, Congressional leaders announced an agreement on a $789 billion final bill. The final bill includes $507 billion in spending programs and $282 billion in tax relief, including a scaled-back version of Mr. Obama's middle-class tax cut proposal, which would give credits of up to $400 for individuals and $800 for families within certain income limits. It will also provide a one-time payment of $250 to recipients of Social Security and government disability support. [9] Despite a $789 billion stimulus package adopted early this year and aimed in part at shoring up state and local coffers, government jobs slipped by 53,000 in September![3 & BLS report] Some economists have forecast that unemployment will rise through the end of the year, when layoffs tend to increase anyway, and some say that the surge of unemployment will extend well into 2010. The job losses have continued for 21 months, the longest such stretch in 70 years of records, analysts say. Friday's report underscores persistent long-term joblessness, with more than one-third of the nation's unemployed out of work for more than six months. [4] In the other hand some people and economists believe that as long as jobs are shipped to India, China and Mexico as the countries with cheap labor force, the unemployment rate will remain high. they ask why the Congress allows corporations to continue sending jobs overseas and allow them to hire more skill worker visa holders when there are thousands American unemployed labor force.[10]
Page 11
Nariman H.,A review on U.S unemployment rate
CONCLUSION The latest report of Bureau of Labor Statistics has amplified worries that a period of lean times lay ahead, where the unemployment rate rose to 9.8 percent in September as employers cut far more jobs than expected. The unemployment rate for men 20 years old and over is more than women. It means women position is more stable than men. The report also shows the economy needs more experts rather than blue collars whereas it require temporary jobs more than permanent ones. In this atmosphere, Management, business and financial operations, Service and Professional occupations have the lowest unemployment percentage. On the other hand, Construction and extraction occupations have the most percentage in the unemployment rate. The recession exist yet despite a $789 billion stimulus package adopted early this year and
aimed in part at shoring up state and local coffers. Some Economists have forecast that unemployment will rise through the end of the year, when layoffs tend to increase anyway, and some say that the surge of unemployment will extend well into 2010.
Page 12
Nariman H.,A review on U.S unemployment rate
REFERENCES [1]:Foxnews.com, Friday, October 02, 2009 http://www.foxnews.com/politics/2009/10/02/jobless-rate-climbs-percent-september/
[2]: New York Times, October 2, 2009 http://www.nytimes.com/2009/10/03/business/economy/03jobs.html?_r=2&hp
[3]: The Associated Press, October 1, 2009 [4]: The Washington post, October 02, 2009 http://www.washingtonpost.com/wp-dyn/content/article/2009/10/02/AR2009100200833.html
[5]: Foxnews.com, Friday, October 16, 2009 http://www.foxnews.com/politics/2009/10/02/jobless-rate-climbs-percent-september/
[6]: Bureau of Labor Statistics of United States September 2009, http://www.bls.gov/cps/lfcharacteristics.htm#unemp
[7]: The Current Population Survey (CPS), Bureau of Labor Statistics of United States September 2009, http://www.bls.gov/cps/
[8]: the most requested CPS tables, Bureau of Labor Statistics of United States http://www.bls.gov/cps/#tables
[9]: New York Times, October 16, 2009 http://topics.nytimes.com/top/reference/timestopics/subjects/u/united_states_economy/economic _stimulus/index.html?inline=nyt-classifier
[10]: Washington Post, October 14, 2009http://www.washingtonpost.com/wpdyn/content/article/2009/10/02/AR2009100200833_Com ments.html
Page 13
November 2009
Nariman H.,A review on U.S unemployment rate
Contents INTRODUCTION ....................................................................................................................... 3 CONCEPTS .............................................................................................................................. 4 Identifying Unemployment ................................................................................................... 4 Who is counted as Unemployed? ........................................................................................... 4 Is there only one definition of Unemployment? ....................................................................... 4 Problem statement .............................................................................................................. 5 LITERATURE REVIEW ................................................................................................................ 6 Employment and unemployment by sex and age ..................................................................... 6 Employment and unemployment by educational attainment .................................................... 8 Employment by class of worker/part-time status and occupation .............................................. 9 Average hourly earnings and average workweek ....................................................................10 US GOVERNMENT POLICY ........................................................................................................11 CONCLUSION .........................................................................................................................12 REFERENCES ..........................................................................................................................13
Page 2
Nariman H.,A review on U.S unemployment rate
INTRODUCTION This article discusses about unemployment, an important economical issue which has a huge impact on everything in the economy. To give more clear and tangible examples, it also explains the issue with the last unemployment report that has been published by Bureau of Labor Statistics of United States, BLS (September 2009). After several months in which the American economy flashed tentative signs of improvement, a sobering report on the national job market released for September 2009, amplified worries that a lengthy period of lean times lay ahead. The economy shed 263,000 jobs in September, and the unemployment rate edged up to 9.8 percent from 9.7 percent in August, according to the Labor Department’s monthly snapshot of the employment picture.
On first part it discusses on concepts. Next it goes to interpret and analyze the article with showing table and charts. On next part it gives some information about U.S Government policies in case of unemployment.
Page 3
Nariman H.,A review on U.S unemployment rate
CONCEPTS Identifying Unemployment The unemployment rate is the percentage of those who would like to work who do not have jobs. The unemployment rate is an imperfect measure of joblessness. Some people who call themselves unemployed may actually not want to work, and some people who would like to work have left the labor force after an unsuccessful search and therefore are not counted as unemployed.
Who is counted as Unemployed? Persons are classified as unemployed if they do not have a job, have actively looked for work in the prior 4 weeks, and are currently available for work. Actively looking for work may consist of any of the following activities:
Contacting An employer, an employment agency Sending out resumes or filling out applications Placing or answering advertisements Checking union or professional registers Some other means of active job search
Is there only one definition of Unemployment? There is only one official definition of unemployment, and that was discussed above. [6] However, some have argued that this measure is too restricted, and that it does not adequately capture the breadth of labor market problems. For this reason, economists at BLS and usually other national statistics offices all around the world develop a set of alternative measures of labor underutilization that included union members, work at home, work experiences, work life …etc. If laid-off workers who have settled for part-time work or have given up looking for new jobs are included, the unemployment rate will rise more than current rate. [1]
Page 4
Nariman H.,A review on U.S unemployment rate
Problem statement The unemployment rate rose to 9.8 percent in September as employers cut far more jobs than expected, evidence that the longest recession since the 1930s is still inflicting widespread pain. The Labor Department at the latest report for September 2009, said that the economy lost a net total of 263,000 jobs, up from a downwardly revised 201,000 in August. That's above Wall Street economists' expectations of 180,000 job losses, according to a survey by Thomson Reuters. [1], [2] More than a half-million unemployed people gave up looking for work last month. If laid-off workers who have settled for part-time work or have given up looking for new jobs are included, the unemployment rate rose to 17 percent, the highest on records dating from 1994. [3]
Figure 1.0 shows the monthly unemployment rate. Its source is Bureau of Labor Statistics website, Current Population Survey. Many analysts expect the economy grew at a healthy clip in the July-September quarter, technically ending the recession, they say if the economy were to grow at a 3 percent pace in the coming quarters, it would not be enough to quickly drive down the unemployment
Page 5
Nariman H.,A review on U.S unemployment rate
rate and it is likely to remain above 9 percent through the end of 2010 [5]. But few think the recovery will be strong enough to lower the jobless rate. Most economists expect the rate to top 10 percent and keep climbing. There are now six unemployed people for every job opening across the United States, and the odds against job seekers are clearly taking a psychological toll. [3]
LITERATURE REVIEW
Employment and unemployment by sex and age Table A-1 shows the Employment status of the civilian population by sex and age. In total status in this table, there is the unemployment rate 9.8 for Sep. 2009 versus 9.7 for Aug. 2009 and 6.0 for Sep. 2008. The civilian labor force participation rate declined by 0.3 percentage point in September to 65.2 percent. The employment-population ratio, at 58.8 percent, also declined over the month and has decreased by 3.9 percentage points since the recession began in December 2007. Also be viewed in case of Men and Women unemployment rate for 20 years and over, there is 7.8 percent for women in contrast of 10.3 for men. It means women position on work is more stable than men.
Page 6
Nariman H.,A review on U.S unemployment rate
Page 7
Nariman H.,A review on U.S unemployment rate
Employment and unemployment by educational attainment Table A-4 illustrates the Employment status of the civilian population 25 years and over by educational attainment through dividing population to four groups: Less than a high school diploma, High school graduates but no college, Some college or associate degree and Bachelor’s degree and higher . As the table shows, the highest unemployment rate in these four categories belongs to first group, less than a high school diploma with 15.0 percent. In contrast Bachelor’s degree and higher, has the lowest amount 4.9 percent that Includes persons with bachelors, master’s, professional and doctoral degrees. It also shows the unemployment rate for this category in year 2009 usually is less than 6 percent. It means in new situation, the economy needs more experts rather than simple workers and blue collars.
Page 8
Nariman H.,A review on U.S unemployment rate
Employment by class of worker/part-time status and occupation Both tables A-5 and A-10 give some information about Employed and unemployed persons by class of worker, part-time status and occupation. Construction jobs fell by 64,000, more than the 60,000 eliminated in August. And service sector companies cut 147,000 jobs, more than double the 69,000 in the previous month. Retailers lost 38,500 jobs, compared to less than 9,000 in August. [1], [8], [7] Temporary help agencies eliminated 1,700 jobs, down from the previous month, but still a sign of labor market weakness. Economists see temporary jobs as a leading indicator, as employers are likely to hire temporary workers before permanent ones. [1], [8], [7]
The uncertainty that surrounds the recovery has made employers reluctant to hire. The Business Roundtable, a group of CEOs from large corporations, said that only 13 percent of its members expect to increase hiring over the next six months. [5]
Page 9
Nariman H.,A review on U.S unemployment rate
As table A-10 shows, Construction and extraction occupations have the most percentage in the unemployment rate, 17.7 percent, while Management, business and financial operations, Service and Professional occupations have the lowest percentages with 5.2 percent. One question may be that why the sum of unemployment rates exceed 100 percent in Table A-10? In this table there are a lot of various fields that some of them have joint together.
Average hourly earnings and average workweek In September, the average workweek for production and nonsupervisory workers on private nonfarm payrolls edged down by 0.1 hour to 33.0 hours. Both the manufacturing workweek and factory overtime decreased by 0.1 hour over the month, to 39.8 and 2.8 hours, respectively. [6], [7] In September, average hourly earnings of production and nonsupervisory workers on private nonfarm payrolls edged up by 0.1 percent, to $18.67. Over the past 12 months, average hourly earnings have risen by 2.5 percent, while average weekly earnings have risen by only 0.7 percent [6]. It's because of declines in the average workweek and shows the Economy is going toward the part-time jobs in this period.
Page 10
Nariman H.,A review on U.S unemployment rate
US GOVERNMENT POLICY When workers are unemployed, they, their families, and the country as a whole lose. Workers and their families lose wages, and the country loses the goods or services that could have been produced. In addition, the purchasing power of these workers is lost, which can lead to unemployment for yet other workers. The endurance of hard times seems likely to increase pressure on the Obama administration and Congress to consider another dose of spending aimed at stimulating the economy, even as the government grapples with deficits projected by some economists to exceed $10 trillion over the next decade. There were a lot of discussions between the White House and Senate about their versions of the stimulus package. But the negotiations between the two chambers and the White House moved rapidly, and on Feb. 11 2009, a little more than 24 hours after the Senate vote, Congressional leaders announced an agreement on a $789 billion final bill. The final bill includes $507 billion in spending programs and $282 billion in tax relief, including a scaled-back version of Mr. Obama's middle-class tax cut proposal, which would give credits of up to $400 for individuals and $800 for families within certain income limits. It will also provide a one-time payment of $250 to recipients of Social Security and government disability support. [9] Despite a $789 billion stimulus package adopted early this year and aimed in part at shoring up state and local coffers, government jobs slipped by 53,000 in September![3 & BLS report] Some economists have forecast that unemployment will rise through the end of the year, when layoffs tend to increase anyway, and some say that the surge of unemployment will extend well into 2010. The job losses have continued for 21 months, the longest such stretch in 70 years of records, analysts say. Friday's report underscores persistent long-term joblessness, with more than one-third of the nation's unemployed out of work for more than six months. [4] In the other hand some people and economists believe that as long as jobs are shipped to India, China and Mexico as the countries with cheap labor force, the unemployment rate will remain high. they ask why the Congress allows corporations to continue sending jobs overseas and allow them to hire more skill worker visa holders when there are thousands American unemployed labor force.[10]
Page 11
Nariman H.,A review on U.S unemployment rate
CONCLUSION The latest report of Bureau of Labor Statistics has amplified worries that a period of lean times lay ahead, where the unemployment rate rose to 9.8 percent in September as employers cut far more jobs than expected. The unemployment rate for men 20 years old and over is more than women. It means women position is more stable than men. The report also shows the economy needs more experts rather than blue collars whereas it require temporary jobs more than permanent ones. In this atmosphere, Management, business and financial operations, Service and Professional occupations have the lowest unemployment percentage. On the other hand, Construction and extraction occupations have the most percentage in the unemployment rate. The recession exist yet despite a $789 billion stimulus package adopted early this year and
aimed in part at shoring up state and local coffers. Some Economists have forecast that unemployment will rise through the end of the year, when layoffs tend to increase anyway, and some say that the surge of unemployment will extend well into 2010.
Page 12
Nariman H.,A review on U.S unemployment rate
REFERENCES [1]:Foxnews.com, Friday, October 02, 2009 http://www.foxnews.com/politics/2009/10/02/jobless-rate-climbs-percent-september/
[2]: New York Times, October 2, 2009 http://www.nytimes.com/2009/10/03/business/economy/03jobs.html?_r=2&hp
[3]: The Associated Press, October 1, 2009 [4]: The Washington post, October 02, 2009 http://www.washingtonpost.com/wp-dyn/content/article/2009/10/02/AR2009100200833.html
[5]: Foxnews.com, Friday, October 16, 2009 http://www.foxnews.com/politics/2009/10/02/jobless-rate-climbs-percent-september/
[6]: Bureau of Labor Statistics of United States September 2009, http://www.bls.gov/cps/lfcharacteristics.htm#unemp
[7]: The Current Population Survey (CPS), Bureau of Labor Statistics of United States September 2009, http://www.bls.gov/cps/
[8]: the most requested CPS tables, Bureau of Labor Statistics of United States http://www.bls.gov/cps/#tables
[9]: New York Times, October 16, 2009 http://topics.nytimes.com/top/reference/timestopics/subjects/u/united_states_economy/economic _stimulus/index.html?inline=nyt-classifier
[10]: Washington Post, October 14, 2009http://www.washingtonpost.com/wpdyn/content/article/2009/10/02/AR2009100200833_Com ments.html
Page 13
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