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Horrible, or Just Grim?
by Mark Stein
Aug 1 2008
Aug 1 2008
The economy lost jobs for the seventh straight month, and the unemployment rate jumped to a four-year high. Is there a silver lining in here somewhere?
Okay, news on the job market is out and everyone agrees it's not good. But how bad is it?
In its press release on the latest numbers, the Bureau of Labor Statistics notes that "over the past 12 months, the number of unemployed persons has increased by 1.6 million, and the unemployment rate has risen by 1 percentage point."
Lest you think the problem might be limited to new workers entering the market faster than the economy can create jobs for them, the B.L.S. has a little factoid to disabuse you: "The number of unemployed persons who had lost their last job...has risen by 778,000 over the year."
Felix Salmon of the Market Movers blog elsewhere on Portfolio.com sums up the jobs situation in one word: "ugly."
"Remember too that the official unemployment rate understates the severity of the downturn, as it doesn't count formerly full-time employees now working part-time," Salmon writes. "The number of people now who are either unemployed or underemployed is surely larger than it has been for many, many years."
Even Larry Kudlow on CNBC, a notorious economic Pollyanna, says the country is in a "mild recession." "There's no way around it," he said.
Maybe, maybe not, says John Challenger, chief executive of the recruitment firm Challenger Gray. "It probably feels like a recession for many Americans, particularly those looking for a job," he said, but he encourages people to keep today's number in "perspective."
He notes that the biggest reason for the jobless-rate spike is teenagers. More than 20 percent of them are without work, the B.L.S. says; Challenger attributes this to the unavailability of summer jobs.
Challenger adds that the unemployment rate for people at least 25 years old is 4.4 percent, "hardly a level indicative of widespread joblessness."
Fair enough. But it's not so much the absolute number that worries people as much as the trend: The overall unemployment rate jumped 0.2 percent in a month; for men, it's risen 0.4 percent in two months.
That compounds worries about $4-a-gallon gasoline, an economy in the doldrums, sclerotic credit markets, plummeting housing values, and well-publicized bank failures.
Even Challenger concedes that, to a large degree, all economics—like all politics—ultimately are local.
"This is not to say that people, regardless of age, are not struggling to keep and find jobs," he said. "The payroll survey confirms that employers are shedding more workers than they are adding.
"Of course, for the individual who is out of work," he added, "the unemployment rate is not 20.3 percent, 5.7 percent, or 4.4 percent. It is 100 percent."
In its press release on the latest numbers, the Bureau of Labor Statistics notes that "over the past 12 months, the number of unemployed persons has increased by 1.6 million, and the unemployment rate has risen by 1 percentage point."
Lest you think the problem might be limited to new workers entering the market faster than the economy can create jobs for them, the B.L.S. has a little factoid to disabuse you: "The number of unemployed persons who had lost their last job...has risen by 778,000 over the year."
Felix Salmon of the Market Movers blog elsewhere on Portfolio.com sums up the jobs situation in one word: "ugly."
"Remember too that the official unemployment rate understates the severity of the downturn, as it doesn't count formerly full-time employees now working part-time," Salmon writes. "The number of people now who are either unemployed or underemployed is surely larger than it has been for many, many years."
Even Larry Kudlow on CNBC, a notorious economic Pollyanna, says the country is in a "mild recession." "There's no way around it," he said.
Maybe, maybe not, says John Challenger, chief executive of the recruitment firm Challenger Gray. "It probably feels like a recession for many Americans, particularly those looking for a job," he said, but he encourages people to keep today's number in "perspective."
He notes that the biggest reason for the jobless-rate spike is teenagers. More than 20 percent of them are without work, the B.L.S. says; Challenger attributes this to the unavailability of summer jobs.
Challenger adds that the unemployment rate for people at least 25 years old is 4.4 percent, "hardly a level indicative of widespread joblessness."
Fair enough. But it's not so much the absolute number that worries people as much as the trend: The overall unemployment rate jumped 0.2 percent in a month; for men, it's risen 0.4 percent in two months.
That compounds worries about $4-a-gallon gasoline, an economy in the doldrums, sclerotic credit markets, plummeting housing values, and well-publicized bank failures.
Even Challenger concedes that, to a large degree, all economics—like all politics—ultimately are local.
"This is not to say that people, regardless of age, are not struggling to keep and find jobs," he said. "The payroll survey confirms that employers are shedding more workers than they are adding.
"Of course, for the individual who is out of work," he added, "the unemployment rate is not 20.3 percent, 5.7 percent, or 4.4 percent. It is 100 percent."
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