The unemployment rate is the great ball and chain putting a drag on U.S. economic recovery. It's such a problem that although the unemployment rate fell from 9.7 percent in May to 9.5 percent in June, more jobs were cut than were created. Jobless Americans out of the labor force are skewing all of the stats within the jobs report. The stock market, accepting the numbers at face value, rose slightly Friday morning. But soon after a decline in factory orders was reported at 10 a.m., the Dow Jones Industrial Average lost 32.5 points. The turgid U.S. economy is full of conflicting details. Even as job creation, factory orders and consumer confidence fell, many of the manufacturing companies that want to hire can find workers with the kind of skills they need.
Source for this article: Unemployment rate down, job loss up, factories hire, what gives by Personal Money Store
Unemployment rate, consumer confidence and anything else
The unemployment rate reverberates throughout the U.S. economy. An uncertain employment picture wreaks havoc on consumer confidence, which declined in June. The decline in consumer confidence led to a decline in auto sales, and pushed numerous of the pending home sales off a cliff as tax credits for home buyers expired. Consumer spending makes up around 70 percent of the U.S. economy, and disposable income is a distant memory for millions of jobless workers.
Why the unemployment rate dropped:
Since July 2009, the unemployment rate reached its lowest point. But it was reported by the Wall Street Journal the decline wasn't due to improvement within the labor market. A loss of 125,000 jobs should have increased June’s unemployment rate. But 652,000 individuals gave up looking for a job — the sharpest one-month decline in 15 years within the Labor Department's survey. Other opportunities like school could possibly be being explored by some. Some are at the end of their unemployment benefits. Within the last 2 months, 1 million people stopped looking for work.
Jobs are mistmatched for numerous of the unemployed
The unemployment rate remains high because plenty of individuals are still applying for the jobs. It was reported by the New York Times that the problem is a mismatch between the kind of skilled workers needed and the ranks of the unemployed. Domestic manufacturers accelerated the long-term move toward more automation, laying off their lowest-skilled workers and replacing them with cheaper labor abroad. Now these companies need to hire some new individuals who can operate sophisticated computerized machinery, follow complex blueprints and demonstrate higher math skills than old-school assembly line workers.
Does the jobs report have a silver lining?
One must dig deep to discover some positives about the latest jobs report. It was reported by the Washington Post that Friday’s jobs report could mean that the economic recovery that started last year has lost momentum, but the numbers are not so bad as to suggest the nation is heading into a double-dip recession. The numbers show the US economy falling. The job growth number, for instance, is a decline from stronger levels in March and April, but the June job creation number of a mere 83,000 is better than any month out of the past 31, other than the last two.
Discover more about this topic here:
New York Times
nytimes.com/2010/07/02/business/economy/02manufacturing.html?_r=1&ref=us
Wall Street Journal
blogs.wsj.com/economics/2010/07/02/why-did-the-unemployment-rate-drop-2/
Washington Post
washingtonpost.com/wp-dyn/content/article/2010/07/02/AR2010070202004.html?hpid=topnews
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