Many small businesses and larger firms are beginning to welcome back more employees. The only problem is, is the unemployment rate totally legitimate? Some believe that the unemployment rate has been miss calculated leaving the data incorrect. The problem stems from nonfarm employment surveys, which are derived from a big survey of employers. On the other hand the unemployment rate is derived from a much smaller survey of households. The difference in the gathering of data leaves uncertainty for legitimacy with the unemployment rate calculations.
Friday, March 4, 2011
America's Recovery: The new new normal
So far, the economy looks like it is starting to make a turn for the better in terms of the unemployment rate. As of today, the unemployment has dropped to 8.9%, which is the lowest it has been in years.
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4 comments:
Also, we've been talking about and the news has been reporting on the fact that the unemployment rate is not quite correct mainly because many people are dropping out of the work force - either retiring early or going back to school.
Besides the questions regarding the accuracy of this data, we have to consider future risks to job growth including rising oil prices. This can prevent consumption and force firms to cut more costs, including laying off temporary workers, cutting wages, exploiting enormous cheap labor from other countries such as China. This can lead to decreasing jobs offered to American labor.
The unemployment rate is in my opinion the one aspect that will continuously see improvement in the near future. The large amount of people that will be retiring in the next ten years will open vacancies for other people in the work force which will naturally decrease the unemployment rate.
I agree with Tran that the chance of rising oil prices would induce the unemployment rate, forcing the firms to slash all costs in order to be profitable, as a result, this might trigger another recession.
However, considering that our population is growing older like Diego said, it would create job opportunities for the younger people to take. Unfortunately, this would create a strain on the social security system.
This report clearly states that the average work hours weekly remains unchanged which is 34.2 hours. It would be nice to see if it was increasing or decreasing from last year.
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