Big Third Down

Bad news on employment

By Jeff Thredgold, CSP
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7.6%…going to 9.0%+

As one would expect, the painful plunge in employment led the unemployment rate sharply higher. January’s 7.6% rate was up 0.4% from December’s 7.2% rate. The unemployment rate 12 months ago: 4.9%.

Given expectations of hundreds of thousands of more layoffs and job eliminations, the nation’s unemployment rate is likely to reach, and perhaps exceed, 9% before the end of 2009. More bearish forecasters see the rate easily reaching double digits by this time next year.

“Under” employment

A more alarming measure of employment pain—known as the underemployment rate—has drawn more interest during the past year. The rate includes the unemployed, an estimate of those discouraged workers who have now left the labor force (and are thus not considered unemployed), and those millions of workers employed part-time who would prefer to work full-time.

That figure reached 13.9% in January, up from 13.5% in December. The 13.9% was the highest for this measure since it was first calculated in 1994.

Global Pain

Severe weakness in American employment is not an isolated situation.
Employment declines are found around the globe, with two solid
illustrations:

Canada: The loss of an estimated 129,000 jobs in January was the
worst monthly performance in more than 30 years. The loss included
111,000 jobs in manufacturing, primarily at auto makers. In addition,
the unemployment rate moved sharply higher to 7.2%, up from December’s
6.6% rate, the largest jump since 1992. It was just a year ago that
Canada had a 5.8% jobless rate, the lowest in 33 years.

China: The Chinese Communist Party’s office on rural policy
estimated in recent days that 20 million migrant workers have lost
their jobs in recent months. While China doesn’t report nationwide
unemployment, it does somewhat track the estimated 130 million rural
migrants who travel from their home villages seeking work (The Wall
Street Journal).


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