Saturday, March 07, 2009

Grim Employment Numbers for U.S. Economy

Wall Street Journal - Jobless Rate Tops 8%, Highest in 26 Years
Bloomberg - Surging U.S. Unemployment Rate Puts Pressure on Obama

The jobless rate in the United States jumped above eight percent when the government released figures on Friday, going from 7.6% to 8.1%. The new unemployment figure is the highest since 1983.

The total number of unemployed in the U.S. is now around 12.5 million, and economists expect that number to continue to rise during 2009. In all, the U.S. has shed around 4.4 million jobs since December 2007. The jump in unemployment recently announced was greater than that projected (7.9%) and has already surpassed what the Obama administration had predicted would be the average rate for 2009.

One economist predicted the unemployment percentage to hit 10% by the end of 2009, despite measures in the recent stimulus bill that were projected to create 3.5 million jobs. Certain U.S. economic sectors are being particularly hard-hit by the economic crisis: the manufacturing and construction sectors lost 250,000 jobs and the service sector lost 350,000. The only areas of the U.S. economy that saw a jobs increase in February were the government and the health care industry.

Declining consumer spending has helped contributed to the U.S. job losses. Consumer spending declined during the second half of 2008 and is predicted to decline for at least the first half of 2009. That would be the longest decline since records starting tracking that indicator in 1947.

1. Will the stimulus bill halt the decline in jobs, or will unemployment only drop when the U.S. economy's financial sector begins to recover?

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