Academic journal article ABA Banking Journal

When Will the Jobs Return?

Academic journal article ABA Banking Journal

When Will the Jobs Return?

Article excerpt

With the national unemployment rate holding at 9.5%, many are asking when the jobs will return. The answer, unfortunately, is that the while the employment outlook is improving, recovery is likely to be very gradual.

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It is worth noting that not all areas of the country are suffering the same. As the chart shows, in the Plains states and part of New England, unemployment is running 4-7%. On the other hand, in 11 states in the West, industrial Midwest, and Southeast, unemployment is running at 10-14%.

For the nation as a whole, the unemployment rate peaked at over 10% last October and has hovered at 9.5% or higher for over a year. And there are some discouraging trends. Non-government employers added 400,000 jobs in March and April 'combined), but only 150,000 in the three following months. It takes over 100,000 a month just to keep up with the growth of the labor force. Moreover, new unemployment insurance claims (seasonally adjusted), which had generally been trending down since early 2009, began to spike up again in July.

Even more troubling is the number of long-term unemployed. The median time out of work climbed to about half a year in June, by far the longest on record. Extension of unemployment benefits, allowing job searchers to be more patient, explains some of this. For many laid-off construction and industrial workers, however, their skills may be in less demand going forward, which may keep the unemployment rate elevated for some time. …

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