Tag Archives: unemployment rate

Blast(s) from the Past: The Fact File and the Primary Concerns of American Investors

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In a post published on Gallup.com earlier this week, Dennis Jacobe (Chief Economist at Gallup) discussed the most recent findings from the Wells Fargo/Gallup Investor and Retirement Optimism Index survey; a survey conducted quarterly among investors to get a gauge of the political and economic “situations” of most concern to investors. The survey asks investors about a series of possible situations in the U.S. and whether they are helping or hurting the investment climate in the United States, using a scale that ranges from “hurting a lot” to “helping a lot.” (The survey points were September 2011 and February 2012 and the full report can be viewed here).

Given that we have looked at many of these same issues in the past few months, we thought it would benefit our newer readers to link to these analyses (as they have the tendency of getting lost in the mix). Below are some of the key results from the Gallop survey, along with these links to our reporting on each issue. Generally, you will notice that issues we have identified as serious have remained of high concern with investors, while those issues we have generally viewed as creations of media hype have diminished.

Percent of respondents in the Wells Fargo/Gallup Investor and Retirement Optimism Index survey who said that the issue was hurting he investment climate a lot, with links to our reporting

September 2011

February 2012
A politically divided federal government

74%

73%
The unemployment rate

83%

62%
Price of energy, including gas and oil

62%

53%
European debt crisis

48%

48%
Are there issues that we’ve missed that you want us to look at? If so, let us know in below in the comments or by sending us a message directly.

January 2012 Unemployment Down in 45 States–Has the Long Anticipated Recovery Begun?

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In an economic news release published earlier today, the Bureau of Labor Statistics reported that unemployment fell in 45 states in January 2012.  In January, unemployment was down again in California—10.9% in January compared to 11.1% in December 2011 and 12.1% in January 2011. This marks the sixth straight month that unemployment has fallen in the state; a promising sign after years of economic stagnation. In an earlier post we noted how important the California economy is to the United States on the whole.  As we explained in that post, the reason we focus on California is that California is responsible for a full 12% of the country’s Gross Domestic product, the largest contributor of all the states and what happens in California gives economists a good idea where the country is headed as a whole.

Last month, we saw positive signs in California’s unemployment rate and this month, as we anticipated, the positive news has spread to 44 other states.  Perhaps the best news in this report is that there are signs of improvement in states where the employment situation had been abysmal through much of the recession.  For example, in Nevada unemployment was down to 12.7% in January 2012 from 13% in December 2011 and down from 13.8% in January 2012; Mississippi down to 9.9% from 10.4% the month before and 10.5% in January 2012; and, finally, Michigan, the poster child for the recession, was down 0.3% from December 2011 landing at 9% in January 2011 down nearly 2% from January 2011’s 10.9% rate. Taken together, these numbers show that the recovery that is underway is not a regional phenomenon, but truly occurring across the country.

February 2012 Unemployment 8.3%

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This morning, the Bureau of Labor Statistics released its report on the U.S. employment situation for February 2012, confirming the positive signs shown in ADP’s payroll figures released earlier this week.  As the chart below shows, while the unemployment rate stalled at 8.3% in February; 0.5% higher than January 2009 when President Obama was sworn in, but at the same as rate as his first full month in the presidency (February 2009) the economy added a significant number of jobs. (The chart is color coded red for months that President Bush was in office, and blue for President Obama).

In February, total nonfarm payroll increased by 227,000 jobs. Job growth was widespread throughout the entire private sector, with large increases in professional and business services (+82,000 jobs), health care and social assistance (+61,000 jobs), and manufacturing (+31,000 jobs). Government employment, however, continues to stagnate: in the past 12 months, the sector has lost 22,000 jobs.  Additionally, the change in total nonfarm payroll employment for December was revised from +203,000 to +223,000, and the change for January was revised from +243,000 to +284,000.
On the less positive front, the number of long-term unemployed (e.g., those who are unemployed for 27 weeks or longer) remained high in February at 5.4 million, accounting for 42.6% of the unemployed. However, that was down from 5.5 million in January.

In short, as with the recent upwardly revised numbers on GDP growth for the 4th quarter of 2010, the economy continues to trend in the right direction, nevertheless, it would appear that higher growth and more jobs are still needed to reverse the massive decline brought on by the Great Recession.

We would like to hear from you.  How does the employment situation look in your hometown?

 

Rising Unemployment among Youth (Ages 16-24) in the OECD

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In last week’s post on the December 2011 unemployment numbers in the OECD, we showed how the total unemployment rate across the OECD has remained relatively stable in recent months, ending December 2010 at 8.2%; the same rate as in November 2010. While some countries—i.e., Germany and the United States—have seen a consistent decrease in unemployment since September 2011, the majority of states have not been so lucky: Spain, for example, ended 2010 with a shocking 22.8% unemployment rate, more than 8% higher than the country with the second highest unemployment rate (Ireland, with 14.5%).

What we did not discuss at the time, however, was the disproportionate impact the economic crisis has had on certain age groups. Today, we look at unemployment trends among the youth (ages 16-24); trends that are much more alarming than the overall unemployment trends.

The first chart, below, displays youth unemployment rates from January 2000 through December 2011 for the EA-17 (e.g., the 17 European Union member states that have adopted the Euro as their currency) and the EU-27 (e.g., all 27 European Union member states). From a low of around 15% unemployment at the start of the economic crisis in 2008, youth unemployment has grown to over 21% in 2011 with no sign of abating.

Source: Eurostat

The following chart uses the same Eurostat data, but looks at within-country trends over the past 4 years. We’ve also included the United States in this sample.

Note: The data labels represent the unemployment rates in Q3-2011.

 

Viewing the data in this way shows just how dire the situation is for younger job seekers in many countries. In Spain, the youth unemployment rate rose from an already high 24.6% in 2008 to 47.8% by the third quarter of 2011, more than twice as high as the total unemployment rate of 22.8%. A similar trend is seen in the other Southern European countries, including Italy (from 21.3% in 2008 to 28.2% in 2011), Greece (from 22.1% in 2008 to 45.8% in 2011), and Portugal (from 20.2% in 2008 to 29.9% in 2011).

As for the United States, the youth unemployment rate increased from 12.8% in 2008 to 17.5% in 2011; well below the EU-27 average of 21.6% in 2011, but close to double that of Germany (8.6%), Austria (7.3%), and the Netherlands (7.6%).

In short, it is important to keep different demographic age groups in mind as we evaluate economic trends. From this data, it is clear that the youth have been particularly affected by the Great Recession, and the recent economic gains (at least in the case of the United States) have done little to improve the situation of this group.

 

Unemployment Rates across the OECD: December 2011

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On Tuesday, the Organisation for Economic Co-operation and Development (OECD) released the harmonized unemployment rates for December 2011, showing an unemployment rate across the OECD area of
8.2%; the same rate as the previous month. Similarly, the rate within the Euro area also remained unchanged at 10.4%, marking a continued high since the start of the economic crisis in 2008. These averages mask a great deal of cross-national variation, however, with some countries having extraordinarily high unemployment – i.e., Spain (22.9%), Ireland (14.5%), and Portugal (13.6%)—and others having relatively low unemployment—i.e., Austria (4.1%), the Netherlands (4.9%), and Luxembourg (5.2%).

As we noted in a previous article, unemployment in the U.S. fell to 8.3% in January 2012, marking the fifth consecutive month that the rate has declined. To put this trend in perspective, we wanted to look at the unemployment trends in other OECD countries. The following chart shows unemployment rates in selected OECD countries from September 2011 through January 2012 (note: January 2012 rates were only available for Canada and the U.S.):

Although there’s a lot going on in this chart, one trend is unmistakable: whereas most of the countries in the sample have seen a steady increase in unemployment rates over this period, only the U.S. and Germany have seen consistent declines in unemployment over this period. Furthermore, the rate in the U.S. is quickly approaching the OECD average, and is already significantly below that of the European Union.

In short, while the U.S. economy still finds itself in a big hole, the recent trends are very optimistic; something that cannot be said for very many of the other OECD member states.