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House Price Bubble Deflated?
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Where Were the Whistleblowers?
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Comparing American and European Unemployment Insurance
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Jun 06 2008 12:00am EDT
Behind the Unemployment Rate Jump
The job market contracted for the 5th straight month with a headline grabbing 0.5 percent jump in the unemployment rate to 5.5 percent -- the biggest spike in 22 years. The Labor Dept. said the main culprit was the number of people entering the labor force which surged by 861,000. That 's the biggest monthly change since January 1975. (Incidentally, that was two months before the 1973-1975 recession came to an end.)
The reason for the jump?
High school and college graduates looking for work:- The unemployment rate for those over 25 rose considerably less than the headline: 0.2 percent to 4.1 percent.
- Meanwhile, for those between 16-24, the unemployment rate jumped 2 percent to 13 percent.
- But the biggest reason for the jump is the number of high schoolers looking for work. Their unemployment rate skyrocketed by 3.3 percent to 18.7 percent.
This from Michael Moran of Daiwa Securities, who told Reuters:
It was not a half-bad report except for the unemployment rate which clearly makes it a soft report. Most of the increase in unemployment was from workers entering the labor force and a lot of those workers were young workers, probably people getting out of school and not finding jobs right away. But that's still an indication of a soft economy.
