Following the economic news, it was recently released that the employment rate is consistent to recovery and recession. Recession refers to a significant fall of activity in the economy if it goes beyond a few months. This is usually noted in industrial production as well as in employment. It’s also denoted by a negative growth in the economy measured by the GDP. A recession lasts from six to eighteen months, which leads to a fall in the interest rates that stimulate a countries’ economy as it offers cheap money borrowing rates. I believe that unemployment is consistent to recovery and unemployment rates are recovering from the economy’s recession.
The report also shows that the economy added a certain number of employees, but on top of that, a high percentage of people remained without jobs. The rate of unemployment was below 4.7 % and it shows that US has a job deficit of 11.4 million jobs. As the economy recovers from the recession about 321,000 job positions have to be created every month. This will enable the state to close the unemployment gap by around 2020.
The labor markets are situations where workers seek for jobs which are paying and employers go in search of workers who are willing to work. According to the report people may stay unemployed up to 25 weeks. This ranges from 21% to about 41%. As a result of this, it is noted that many people remain without jobs for more than six months. When an economy recovery is slow it discourages investment and hiring process. The reason behind that is investors sell all the stock in the industries which are prone to employment slowdown. Staffing firms undergo the same pressure therefore affecting the hiring procedures.
The U-6 employment rate is an approach to employment issues in the economy which bureau labor of statistics uses to measure employment in a broader way. U-6 looks mostly puts into account people in search of full time jobs. It also includes those workers who are on marginal attachment, and people working on part time basis due to economic reasons. Other measures such as U-3 consider people on part time jobs as employed but they may be working for less than an hour in a whole week. Those who are marginally attached include those people who have become frustrated while being in the search of a job, but are still willing to work. Persons who are no longer in search of job because they have given it up are also included on the search. As a result of these reasons I don’t feel that the standard unemployment series bring out a clear picture of the labor market.
Nonfarm payroll fluctuates any business cycle. During economic recession this kind of unemployment declines and when it increases, it is a sign of recovery after a declining period. As a result it’s noted that jobs become available after the economy begins to recover from a recession period. Employment in the individual sectors is also affected by recession and economy recoveries.
According to these statistics, the crises arising from financial matters shows that employment recovery would still be slow. This would have happened irrespective of the government measures. The positive responses were not given, but those discussed were against hiring. That is why most companies could not employ potential job seekers putting the fate of the America’s economy in question. As a result, the incentives for people to remain unemployed were created.