New Jobs Numbers Show Unemployment Decline to 377K, Positive Job Growth Ahead
UPDATE (6/7): According to the Associated Press, the number of Americans seeking unemployment aid has fallen to 377,000, from 389,000 last week. The drop suggests modest job growth and is the lowest level for unemployment benefits in the last five weeks. In line with earlier statements, an improvement in one week's unemployment benefit numbers is no reason for celebration. It is only when the unemployment benefit level is below 375,000 that the country tends to see strong hiring trends enough to lower the unemployment rate. But there are signs hinting at positive job growth in the coming months, as the Labor Department reported U.S. worker productivity was at its lowest point between January and March. Companies will have to start hiring more if business ramps up, since they can't stretch their current employees much further.
On Friday, the U.S. Bureau of Labor Statistics reported that the unemployment rate crept up to 8.2%, essentially remaining unchanged since last month’s job data was released. The United States only saw 69,000 jobs created in May and jobs number reports for the previous two months were corrected downwards.
There is now increased concern that the United States’ recovery efforts could in fact be slowing. And when all this happens, the country sees key politicians quick to point fingers. Romney issued a statement criticizing the efforts to bring adequate jobs to Americans, stating that the poor jobs report was “devastating news for American workers.” The Obama administration acknowledged the unacceptable jobs report by responding via a two-pronged approach: applauding the successes of jobs creation in health care, transportation and warehousing, and wholesale trade, as well as emphasizing the need for Congress to act to create jobs and help the economy.
Growth has been slow over the past few months. That knowledge goes without question. Jobs reports need to be put into context when looking at the big picture; this is just one month’s jobs report and is the first increase in unemployment in the past 11 months. If this continues for the next two or three months, then yes, there will be reason for concern. But a very small increase in the unemployment rate, which leaves the rate relatively unchanged from April to May, is no reason for panic.
There’s no saying how this will play out in the 2012 elections, and I don’t think there’s a need to speculate. In order to properly assess the work of a president’s administration, people need to look at trends.
As compared to the previous administration (shown to have lost 800,000 jobs in one month), jobs are still being added to the economy, albeit at a slower rate. Over the past five months, the country has created an average of 169,000 jobs.
Several key swing states have seen drops in unemployment rates, for example:
Auto and steel workers in Ohio are getting jobs again, as the unemployment rate has dropped from 9.8% in September 2010 to 7.4% today.
Florida has seen some bursts in the labor and real-estate markets, witnessing a large drop in unemployment from 11.3% in September 2010 to a current 8.7%, although today’s rate is still above the national rate.
Virginia, Colorado, and Nevada have also seen drops in unemployment rates over the past 20 months from stronger economic recovery and industry growth.
And there are still plethora of factors that aren’t completely in the United States’ control, but have a big impact on the unemployment rate and economic recovery. The EU crisis and the uncertainty of Greece’s future in the euro zone have played a substantial role. China’s slowing economy also remains of concern to the United States. There are also significant foreign policy concerns with the unrest in Syria and uncertainty in the Middle East, which have taken a very slight focus off the economy.
All of these are unknowns which, while the United States has some hand in influencing, remain largely international issues. However, they all play into the United States’ recovery efforts and jobs growth. Regardless of what politicians may say, the country will be affected by the changing global economy. There should be some comfort in knowing that there was still some level of jobs growth this past month.
Keep an eye on the unemployment rate and trends. Watch how the country’s rate will continue to change with the global economy. One month’s less-than-stellar, but still positive jobs numbers, should not be reason for sounding the alarms. If we continue to see an upward trend in the coming months, then there’s reason for concern and action (and not just finger-pointing).