Monday 5 December 2011

US unemployment rate edges down, hiring remains difficult

Last Friday provided good news for the US labor market. Unemployment edged down to 8.6% in November, the first time for three years that the rate fell below 9%.

http://www.bls.gov/news.release/empsit.nr0.htm

Not everything is rosy, though. Half of the fall in the unemployment rate is due to discouraged jobseekers leaving the labour force. This people typically face higher hurdles for re-entry should the economic situation improve.

Looking forward, more difficult times can be expected. The help-wanted index online, provided by the Conference Board, indicate a further drop in job openings in November:

http://www.conference-board.org/press/pressdetail.cfm?pressid=4349

Also, long-term unemployment remains elevated, with people out of employment for more than 6 months finding it increasingly difficult to find alternative employment opportunities.

In this environment, further stimulus is the only thing that helps. Cutting down on government programs now is not helping a quick turnaround in job creation. That doesn't mean the current programs should not be carefully examined and spending re-oriented towards activation measures (rather than having unemployment idly sitting around at home). But an austerity-led job recovery simply does not exist.