National unemployment is at 9.5%, the highest rate since the recession in the early 1980s. Not even during Stagflation was the job market this bad. Are there any glimmers of hope in the numbers? Perhaps…
First, the rate of increase in unemployment slowed considerably. Unemployment has increased at least .4% since November 2008. It went from just 9.4% to 9.5% in May to June. But this could be explained as employer confidence coming off the stimulus package. If the economy doesn’t pick up on stimulus spending, employers could go right back to cutting jobs, sending us towards double digits. (And since the stimulus is unlikely to work the way the president says it will, this is not an unlikely possibility.)
Second, the number of individuals applying for unemployment benefits week over week has steadily declined all year long. While this is a positive, it could be that this because people have given up trying to find work. This only measures those actually looking to find jobs, and there could be twice as many people without jobs that have given up as those applying for unemployment benefits and looking for work.
Third, the average number of weeks individuals have been employed and the number of long-term unemployed individuals have increased. But this could be explained away as a sign that employers are just holding on to the workers they have now. A stabilization in unemployment doesn’t mean a positive shift in employment figures.
All of these factors combined could show a stabilization in the job market. But unemployment could continue to rise, even with employers largely holding on to their current employees. More individuals will be entering the labor pool this fall as graduates from universities seek work over the summer. But it is possible that, over the next few months, we could see a continued slow down in the total number of unemployed persons if companies begin to rebound in the wake of a recovery.