The Bureau of Labor Statistics released the unemployment report for November this morning (December 5, 2008). It is a pretty gloomy report, with just about all categories or workers and jobs showing less employment. There was, though, at least one category that showed gains; "Health care employment grew by 34,000 in November. Over the past 12 months, health care has added 369,000 jobs." The population is aging, and old people need more care.
Despite a huge reduction in the number of employed (673,000), the unemployment rate was up only a bit, from 6.5 to 6.7 percent, and despite being in what seems to be a severe recession (that may get a lot worse), the unemployment rate over the past year has risen only two percent, from 4.7 to 6.7%. Why has the rise not been more?
The civilian noninstitutional population has increased by 1.889 million over the past year. I am not sure if that is larger than average, smaller than average, or about average. However, the group "not in the labor force" has increased by 1.101 million, which means that the labor force has increased by only .788 million, which is small.
The number employed has decreased by 2.362 million from November of 2007 to November of 2008. If we add this to the .788 million, we get the increase in unemployed, which is 3.150 million. That sounds big, but it would be much larger if either the civilian noninstitutional population had increased more or if there had been fewer dropping out of the labor force.
There are a couple of potential shock absorbers that may lesson the impact of the recession on the unemployment numbers. First, higher unemployment could decrease immigration. This would show up in the noninstitutional population. Second, we can outsource unemployment just as we can outsource employment. If people spend less on toys or clothes or electronics, the impact may be felt in other countries more than it is felt here. When the U.S. catches cold, China may get pneumonia.
There are always lots of unanswered questions in these reports.
Bonus Quotation of the Day…
1 hour ago