Saturday, November 12, 2011

Employment shows a slight rise

by Isabella Woods

Employment levels have increased slightly according to Bureau of Labor Statistics released last month. The month of September saw an increase of 103,000 in the number of people employed, slightly higher than the monthly average for April-September which stands at 72,000. However, the increase should not be seen to hide the more complex employment picture.

Nearly half of the 103,000 increase can be accounted for by 45,000 telecommunications workers returning to their posts after a strike took them off the employment total for August. The total unemployment figure is largely unchanged by the increase in employment, standing at 14 million. The overall unemployment rate is 9.1%. Since April, the unemployment rate has remained stable, varying only between 9.0% and 9.2%.

Beneath the headline figures, we can see a difference in the fortunes of different industries. Reflecting tightened budgets, there was a fall in the number of government jobs of 34,000. Retail and manufacturing also saw falls. Perhaps surprisingly, construction saw a significant increase for the first time since February, with an increase of 26,000. Professional services and healthcare also saw increases.

Demographic surprise

There were striking differences too in the fortunes of different demographic groups. Worst hit by unemployment continues to be the under-twenties, for whom the rate runs at a high 24% (compared to 8.8% for adult men, and 8.1% for women). Among ethnic groups, there were also stark differences. The rate for white people (8.0%) and Asians (7.8%) is half that of black people (16%). For Hispanics, the rate is 11.3%. So, a black teenager is much more likely to be unemployed than a white adult. Such big differentials in the unemployment rates of different groups can lead to social dislocation and increased disaffection among those groups worst affected. In particular, the long-term unemployed within the worst hit groups may not feel they have any realistic chance of gaining employment. Just under half – 45% - of the total number of unemployed has been so for 27 weeks or more.

So, what are the chances of the picture improving? Growth forecasts at the beginning of the year were fairly positive, and the economy has shown signs of slow improvement. GDP growth in the first quarter of 2011 was just 0.4%, up to 1.3% in the second, and likely to hit 2.0% in the third. Similarly, employment rates are likely to continue to show modest rises, with around 150,000 a month forecast for 2012. These small improvements are not enough to make any significant dent in the overall unemployment rate, and therefore not likely to affect the employment chances of the worst affected groups. The Fed is determined to keep interest rates low, with a 2% maximum target, but that may have to be sacrificed if unemployment is to be tackled. For those on the margins of the economy, even basic economic participation such as the ability to compare broadband suppliers to get the best deal may seem alien: they are too busy struggling to find the money for meals. It will be interesting to see whether the Government and the Fed are able to bring down the unemployment rate, thus helping to bring into mainstream society some of those excluded from it through lack of work.

Isabella 'Izzy' Woods is a travel writer and journalist hailing from NYC, though has been traveling Europe and is settled in London (at least for now). She hopes to relocate her family back home in the near future.

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