Job loss up, factories hire, unemployment rate down, what gives?

The unemployment rate is what is holding down the US economic recovery. It’s such a problem that despite the fact that the unemployment rate fell from 9.7 percent in May to 9.5 percent in June, more jobs were cut than were created. Jobless Americans dropping out of the labor force in droves skewed the stats within the jobs report. Friday morning, stock market numbers rose slightly. But soon after a decline in factory orders was reported around 10 a.m., the Dow Jones Industrial Average lost about 32.5 points. The US economy has many conflicting information. Even as job creation, factory orders and consumer confidence fell, numerous of the manufacturing companies that want to hire can find workers with the kind of skills they need.

Source for this article: Unemployment rate down, job loss up, factories hire, what gives by Personal Money Store

Consumer confidence, unemployment, and anything else

The unemployment rate reverberates throughout the U.S. economy. An uncertain employment picture wreaks havoc on consumer confidence, which declined sharply in June. The decline in consumer confidence led to a decline in auto sales, and pushed many of the pending home sales off a cliff as tax credits for home buyers expired. Consumer spending makes up 70 percent of the U.S. economy, and disposable income is a distant memory for millions of jobless workers.

Why the unemployment rate went down so much:

The unemployment rate reached its lowest since July 2009. But it was reported by the Wall Street Journal the decline wasn’t due to improvement in the labor market. A loss of 125,000 jobs should have increased June’s unemployment rate. But 652,000 individuals gave up looking for a job — the biggest decline in 15 years in the Labor Department’s survey. Some might be choosing other possibilities like school. Some are probably just at the end of their unemployment benefits. Whatever the reason, over the past two months almost 1 million individuals stopped looking for work.

New jobs appear to be a mismatch for unemployed workers

The unemployment rate remains stubbornly high because plenty of people are still applying for the jobs. As outlined by the New York Times, the problem is a mismatch between the kind of skilled workers needed and also the ranks of the unemployed. During the recession, domestic manufacturers accelerated the long-term move toward more automation, laying off their workers that weren’t very skilled and replacing them with cheaper labor abroad. Now these companies need to hire individuals who can operate sophisticated computerized machinery, follow complex blueprints and demonstrate higher math skills than old-school assembly line workers.

Does the jobs report have a silver lining?

You have to dig deep to find good things within the last jobs report. The Washington Post reports that Friday’s jobs report could mean that the economic recovery that started last year has lost momentum, but the numbers aren’t so bad as to suggest the nation is heading into a double-dip recession. The numbers show the US economy falling. The job growth number, for instance, is a decline from stronger levels in March and April, but the June job creation number of a mere 83,000 is better than any month out of the past 31, other than the last two.

Find more information here:

New York Times

nytimes.com/2010/07/02/business/economy/02manufacturing.html?_r=1&ref=us

Wall Street Journal

blogs.wsj.com/economics/2010/07/02/why-did-the-unemployment-rate-drop-2/

Washington Post

washingtonpost.com/wp-dyn/content/article/2010/07/02/AR2010070202004.html?hpid=topnews