Is the economy on the mend or is it spurting with a moment of promise to only fall back again?
Only history will tell us; but, in a sign of resurgence and promise last Friday, ABCnews.com released a story highlighting the drop in unemployment with the headline: “247,000 Jobs Lost in July as Unemployment Rate Drops to 9.4%; Much Better Result Than Anticipated”.
A Drop in Unemployment Numbers is Good, Right?
By all accounts this a triumphant moment. A time to take a deep breath, break into a smile, and feel resolved that things are getting better.
After all, reports indicate that employers cut the fewest amount of jobs in almost a year- 247,000 jobs in July.
This emboldens third quarter forecasts of substantial stability and recovery for our tired economy.
The Reality of Unemployment Today
Superficially, it seems this is a bright star of hope offering those in need of a glimmer of hope that moment of comfort.
Or, it may be a veiled attempt to shed light on an otherwise dark moment in our history?
After all, in counterpoint to the recent report there are some economists who feel that the numbers were distorted by an atypical spell of job additions within the automobile industry; done so to restart production a month earlier than originally projected.
Then there is the fact that of the originally projected 325,000 jobs lost, in July we as a nation lost only 247,000 of our payroll jobs–the least recorded since last August.
Moving in the Right Direction… but…
Another upside to the promising figures is of those within the industries of manufacturing, finance and professional services their job cuts were substantially smaller than expected.
In a statement of stern encouragement UBS economist Jim O’Sullivan offers:
“It’s almost an average recession number, but coming from a deep recession, we’re at least moving in the right direction. You have actually seen a turning point.”
Similarly, offering encouragement President Obama commented on the recent report during a brief statement at the White House by saying:
“Today, we’re pointed in the right direction … while we’ve rescued our economy from catastrophe; we’ve also begun to build a new foundation for growth.”
…This is
Conditional Economic Growth
This may seem as further proof to recovery substantiated by our President, but then there is the fact that Presidential Spokesman Robert Gibbs added later by inserting a condition to the Presidents positive tones:
“At the same time, [Obama] still believes the unemployment rate, which is a lagging indicator, will hit 10% later this year.”
Consider that the reported number of unemployed workers who find themselves out of work 6 months or more rose from 29% to 33.8%, and the average period of unemployment moved from 24.5 weeks to 25.1, times may not be on the mend as much as the President would like to admit.
Headlines Don’t Matter To Many
For the nearly 14.5 million Americans who found themselves out of work in the month of July, the recent headline by ABCNEWS may not find as much celebration.
Many who have lost their jobs are struggling to keep afloat or filing bankruptcy as a way to try to keep their heads above water.
In searching for some clarity it is beneficial to provide accurate findings which paint a picture of reality, rather than projected optimism.
Reality: the nation’s underemployment rate, the figure which includes the unemployed, people working part-time even though they want full-time work, and those who stopped looking for work, dropped from 16.5% to 16.3%.
More promising news is that the report indicated that America’s average work week rose incrementally from a record low of 33 hours to 33.1 hours.
Additionally, our average hourly wages rose to $18.56 from $18.53 in July.
Further reality: even with the spurt of increased jobs primarily aided from the automakers increase, many economists feel job losses could return to higher levels in August.
The reason for this being that automakers won’t have their regular job additions and some employers will cut their staff in reaction to a recent increase in the federal minimum wage.
However, what might be the most relevant sign of recovery, one which should substantiate a promising outlook as we turn the corner towards the end of 2009, is the fact that the temporary services industry saw rapid and severe improvement from the month before.
In a staggering cut to the average, temporary service jobs reduced merely 10,000 jobs as opposed to the 37,000 jobs from the previous month.
Drop is Good News– But “Manageable Unemployment” Not Coming Until 2013?
However, as in life when there is good there is bad. For there to be light there must be dark.
With all the brilliant news of recovery and a restoration to a nation of promise and financial dominance, there is the fact which underscores a reticence of excitement.
To restore the national unemployment rate to the manageable rate of just 5%, economists feel this won’t happen until 2013, a scary notion for the masses of unemployed workers whose compiling debt is blind to promise and hope.
Job Loss and Bankruptcy Information
