The numbers coming out of the US labour market are just appalling. The unemployment rate is now at 9.5 percent. This is the second highest level since the second world war. The highest point was 1982, when the rate hit 10.8 percent. However, that peak could easily be exceeded by the end of this year. For the last 8 or so months, the US economy has been shedding around half a million jobs a month. June was no expection.
Moreover, the rate of job loss is unprecedented. In only 18 months, the US econmoy has shed 6.5 million jobs. Since May 2007, the unemployment rate has increased by a full 5 percentage points.
Remember, the US has only a limited social safety net. There is no kindly and generous public sector to break the fall from employment to unemployment.
8 comments:
Is this from the household survey or the payroll survey?
Where the household survey includes farm workers, the self-employed and workers in private homes, the payroll survey does not. The payroll survey counts jobs, making no adjustment for multiple jobholders. Yet, adjusting for all differences, the BLS never has been able to reconcile the two series within one million jobs.
Also, direct comparison with 1981 is no good: Up until the Clinton administration, a discouraged worker was one who was willing, able and ready to work but had given up looking because there were no jobs to be had. The Clinton administration dismissed to the non-reporting netherworld about five million discouraged workers who had been so categorized for more than a year.
The Clinton administration also reduced monthly household sampling from 60,000 to about 50,000, eliminating significant surveying in the inner cities. Despite claims of corrective statistical adjustments, reported unemployment among people of color declined sharply.
In sum, this means that current unemployment is higher than in '82, contrary to what the graph would have you believe.
Current US unemployment levels are just over 20% on 1980 calculation methods.
http://www.shadowstats.com/
Given the slope of that chart, it looks like 20% before the end of the year 2009 or some time in Q1 2010. EU figures today show the same level from a low in Q1 2008.
India is loving it - they project growth of up to 7.75% as a result.
Problems are a brewing.
Maybe western governments should cut the cost of employing people and being employed if they want people to be employed and work?
Your comments about the kindly public sector cushioning the blow of unemployment are very much to the point when so many in this country want to cut spending on the public sector.
Another point is that in the Fed's stress tests on the US banking system; the average unemployment rate for 2010 was assumed to be 10.3 percent in 'the most adverse scenario'.
More bank bailouts to come?
I call it Operation Chilli Pepper Up Bum: Nothing like mass unemployment to get people to stop speculating and actually working and starting businesses and innovating. Also: it will curb the lip from the chippy and shitty that we see so much in the public sector and the service sector.
this is just the start, in the 70's it took 10 years for inflation and unemployment to play out. If things don't change we could have 30% plus inflation and unemployment by 2020 ?
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