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Surprising twists in the unemployment data
by Paul Grasso, November 17, 2009
The American economy technically may be back into growth mode, but the October unemployment number certainly did not do much to inspire the confidence of the average American in our economy.
Surveys of economists and others who regularly study these numbers were predicting a slight uptick in the national unemployment number to 9.9%, up from 9.8% in September. Others were predicting 10%, while a few pessimists went out on a limb and predicted 10.1%.
The 10.2% unemployment rate surprised many. In fact, the last time that United States experienced double-digit unemployment in the United States was June of 1983, when national unemployment rate was 10.1% in June of that year. It quickly dropped to 9.4% by the following November.
By contrast, the unemployment rate in the United States was 4.8% in 2007. In less than two years the unemployment rate has increased by 5.4 percentage points. The unemployment rate for adult men has risen to 10.7%, while the more inclusive U6 measure of the long-term unemployed and underemployed rose to 17.5%. In October, nearly one in five Americans have experienced dramatic declines in their ability to work or pay taxes, and at least ten million are now collecting some kind of unemployment benefits or welfare.
The Wall Street Journal declared September 2009 as the best month in nearly two years. After almost 24 months of consistently negative economic reports, polls indicated that Americans were growing more hopeful, in part, from more upbeat reports from many economic commentators and analysts.
The indications were that people believe that the worst part of the recession was over and that the economy would start to grow. According to a September 2009 Wall Street Journal/NBC poll, 35% of people polled felt as though the economy had hit bottom; confidence was much improved over previous months.
Unfortunately, after the brief September surge, some are returning to their negative outlooks once gain. Specifically, results of the October WSJ/NBC poll show that:
- 29% of the people surveyed in October felt the economy has bottomed out, down from 35% in September.
- 58% of the people surveyed in October felt the economic slide still had a potential for further decline, down from 52% in September.
- 42% of people said that the economy will get better over the next 12 months, down from 47% in September.
- 22% of people think that the economy will worsen over the next 12 months, up from 20% in September
Experts report that it is not surprising that people are not optimistic when the national unemployment rate continues to increase every month.
How all of these numbers will affect the average American heading into the crucial holiday shopping season is news the market awaits with some nervousness. According to a Consumer Reports survey, two-thirds of Americans are planning to spend less money this holiday season. This comes on the heels of 2008 in when 75% of Americans cut back their holiday expenses from the previous year. Combine 2008 and these predictions for 2009, and some fear a significant reduction in spending from 2007.
Deloitte issued a report earlier this month predicting that the volume of sales would be up, but that revenue would be down. They base their predication on survey results that indicate shoppers will wait until the deeper discounts occur closer to Christmas. Additionally, the survey revealed that much of the spending would not be for gifts, but would be purchases made by consumers who delayed buying a new refrigerator, vacuum cleaner, or suit of clothes from themselves.
Some economists predict that the economy will need 15-18 million new jobs in the next five years just to return to where the economy was two years ago. The most likely pathway for such massive employment gains is through the generation of entirely new industries.
Labor Market Information
Unemployment Statistics (NYSDOL Data)
Labor Market Overview (NYSDOL Data)
"Over the past year, employers in New York State continued to cut jobs at a more modest pace than employers nationwide, while our statewide unemployment rate remained well below the nation's rate in September 2009," said Peter A. Neenan, Ph.D., Director of the Division of Research and Statistics.
In September 2009, the number of seasonally adjusted private sector jobs in New York State decreased by 18,300, or 0.3 percent, to 7,063,300. The state's private sector job count has now declined in 12 of the past 13 months. The statewide total nonfarm job count (private plus public sectors) also decreased over the month - by 81,700, or 0.9 percent, to 8,562,700 - as summer youth employment programs came to an end.
Between August and September 2009, New York State's seasonally adjusted unemployment rate held steady at 8.9 percent. In New York City, the rate inched up from 10.2 percent to 10.3 percent over the same period. (Note: The state's rate in August 2009 was revised downward from 9.0 percent to 8.9 percent, while the August rate in New York City was also revised downward -- from 10.3 percent to 10.2 percent.)
Educational and health services continued to exhibit job gains, as this sector has throughout the recovery. Other sectors continued to decline, but at a reduced pace.
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