Jumping (or Not) and Unemployment
By Mira Korber, guest blogger.
Pretend for a moment that you are mounted on a jumping horse approaching an obstacle full speed. The next thing you know, you go hurtling through the air like some limp animal. What happened? Your ever-so-noble-steed has pulled a “dirty stop” at the last possible moment before takeoff.
Sounds like what some (non-horse) people are worrying about…regarding American jobs and the unemployment rate. So, what are the odds of an economic “dirty stop?”
In March, the US added 120,000 jobs, and the unemployment rate fell to 8.2%. That’s showing “improvement” but hardly represents a panacea for ever-burgeoning recovery woes. Some economists expected 210,000 jobs added to the economy, and the unemployment rate to remain at 8.3% (accounting for people actively looking for work).
However, as the rate has fallen and a smaller than expected number of jobs have materialized, it seems that fewer people are looking for work. Another issue is that companies, while laying off less, are also hiring less. This accounts for a decrease in unemployment claims. You may expect those claims to demonstrate a healing jobs market, but they more accurately reflect a bottoming out of layoff activity (not necessarily an increase in hiring).
The bottom line? Some say getting thrown from the financial carousel is likely. Others are optimistically waiting for the economic ride to improve. Either way, you’ve got to ride the horse you’re on.
By the way, see this Econlife post for more information on how employment and GDP are related.