Jobless Rate Falls, Hopes Rise
In a surprising sign of progress, the unemployment rate unexpectedly fell to 10 percent in November, from 10.2 percent in October. The rate change is due in part to employers cutting the fewest number of jobs since the start of the recession. In the last two years, more than 7 million jobs have disappeared, leaving Americans in one of the worst economic slumps since The Great Depression.
In reaction to the unemployment drop, the stock market soared. The dollar gained strength and Treasuries declined. As a result, the Federal Reserve could begin raising interest rates, which it has held off doing due to high unemployment rates. Interest rates have remained at record lows near zero, and were not expected to go up until mid-to-late 2010. When interest rates begin going up the strength of the dollar will too.
It was reported that 11,000 jobs were last last month, down considerably from October’s tremendous count of 111,000 losses. October’s number was far less than first predicted (a whopping 190,000 job loss expectation). September’s expected jobless rate was 219,000, but the actual number ended up at 139,000. Experts had not predicted a change for the better until spring or summer, but still warn that the results may only be temporary as job creation still lags. Some say that a one-month break from job losses is not reliable as a sign that the economy is changing for the better.
There are still 11.5 million Americans unemployed, and this is only an estimate. That rate does not include laid-off workers who have given up the search. Besides the unemployment rate, the “underemployment” rate has gone down. That rate went from 17.5 percent to 17.2 percent, a seemingly slight fall, but hopeful nonetheless. The typical length of time people remain unemployed has risen to 28 weeks.
Even though many people find themselves employed, they may be lacking full-time hours and health care. In fact, the number of temporary workers went up to 52,000 last month, a fourth-straight rise and the largest growth since October 2004. The increase of temporary workers is typical, though, as companies often hire slowly before the market has proven the need for full-time help.
Having just held a jobs summit in Washington, President Obama has expressed optimism over the new rates trend, but also noted that economic recovery is nowhere near over. In a speech given in Allentown, Pennsylvania, Obama cautioned against celebrating and alluded to “more bumps in the road.”
Although the current economy is officially worse than the recession of the early-1980s, where unemployment rose to a high of 9 percent, it still does not compete with the worst-ever economic moment in U.S. history. It was back in 1933 during the height of The Great Depression, that the U.S. had its worst unemployment rate to date. That number was a deafening 25 percent.
Payrolls have been decreasing over the recession, but some industries have begun hiring. In the service industry, areas like restaurants, banks and retailers are adding workers. Manufacturing and construction have shown signs of stability. Outfits that have been faring well during these tough times include McDonald’s, makers of chocolate candies, public universities, resume editors and perhaps not too surprisingly, condom manufacturers.
