Layoffs Slow as Slow Recovery Mounts

by Paul Grasso, September 9, 2009

The United States Department of Labor (USDOL) recently released the unemployment numbers from August 2009.  As expected, the "official" unemployment rate continued its steady, albeit slower, march higher. Analysts were surprised, though, because the July unemployment numbers were slightly lower than expected.

The "official" national unemployment rate (the U-3 rate) for August was 9.7%, which is the highest rate since June of 1983.  In 1982-83, the United States was facing a twin problem of high unemployment rates and rising inflation. The highest rate posted during this period was 10.8%, which occurred in November and December of 1982. The unemployment rate did not fall below 5% again until March 1989.

The U-6 rate includes  broader categories of job seekers than does the U-3 rate. This more inclusive unemployment rate swelled in August to 16.8%.  Under the U-6 measure, job seekers are considered "unemployed” if they have been looking for employment sometime in the past four weeks.

Internationally, three of the world's largest economies (Japan, Germany, and France) have reported positive economic growth over the past few months. Meanwhile, Canada's Great Recession has been  shallower than ours, and their recovery seems earlier and more robust.

Japan announced that their economy had grown 3.7% from April to June of 2009 on an annualized basis. This is the first time that the Japanese economy has experienced any growth in well over a year.

Germany and France announced that their economies had grown slightly during the second quarter of 2009.

While there is no set definition for a recession, many people tend to agree that it occurs when there are two straight quarters of negative economic growth.  Therefore, by that definition, the recession has technically ended in Japan, Germany, and France.

This recent news from Japan, Germany, and France comes just a few weeks after the Bank of Canada announced that Canada’s recession has ended.

Given these recent developments, some are predicting that the recession in the United States is either over or about to end.
 
Locally, as reported by New York State’s Department of Labor (NYSDOL), which will not release the state unemployment data for August until later this month, New York State's unemployment rate edged down from 8.7 percent in June to 8.6 percent in July 2009. Over the same time period, New York City's rate increased to 9.6 percent in July, its highest level since June 1997, while the rate in the balance of the state outside of New York City decreased to 7.9 percent in July. The number of unemployed in the state fell from 851,100 in June to 835,900 in July 2009. Labor force levels also fell over the month, decreasing by 34,000 in July.

Clinton County and the North Country are also showing declines in the unemployment rate from June to July. Like the rest of the State, this region is experiencing lower unemployment rates than much of the rest of the nation.

Unemployment Statistics (NYSDOL Data)


"This month's large increase in non-farm jobs was due in part to federal stimulus spending. Stimulus-funded projects helped boost employment in the construction sector. In addition, there was a much larger-than-normal increase in government-funded summer youth hiring this year. In past years, public funds typically provided for about 25,000 summer youth jobs. This year with the addition of federal stimulus funds, a total of approximately 60,000 youth were placed in jobs this summer," said Peter A. Neenan, Ph.D., Director of the Division of Research and Statistics. 

 

After seasonal adjustment, New York State's private sector job count increased by 14,000, or 0.2 percent, to 7,089,500 in July 2009; this was the state's first monthly increase since August 2008. The statewide total non-farm job count (private plus public sectors) increased over the month by 62,100, or 0.7 percent, to 8,644,600 in July 2009. If the country is slowly pulling itself out of the Great Recession, perhaps New York and Clinton County are areas that are leading the way. It is not likely we are out of the woods quite yet, though. Most economists agree that the national unemployment rate will peak at more than 10%, and could stay about that mark for some time to come. 

 

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