U.S. Unemployment Rate Hits Double Digits
Unemployment rate not improving
New statistics on the U.S. unemployment rate were released today, and things haven’t been worse for 26 years. The October unemployment rate was 10.2 percent, more than double normal levels. It’s also the highest unemployment rate the country has seen since 1983, when it hit 10.5 percent.
I have read a lot of things lately that say “economic indicators” say we are in recovery from the recession. I am also familiar with the fact that unemployment rates are “lagging indicators,” and in fact might be the last thing to improve during economic recovery. However, several other current conditions indicate to me that people might have to stay in debt survival mode for a while longer.
Good news before bad
The president signed a bill today that extends unemployment benefits for people whose unemployment insurance is set to expire before the end of the year. People who fit the bill will get an additional 14 weeks of unemployment benefits, and those who live in states with unemployment rates higher than 8.5 percent can get an additional 20 weeks, almost five months, of benefits.
The fact that 8.5 percent is considered a high unemployment rate, and the national unemployment rate is nearly 2 percent higher than that, shows how bad things really are right now. The unemployment rate isn’t the only thing that got worse last month.
More economic indicators
Bloomberg.com reports that payrolls fell 190,000 in October. Factory payrolls fell 61,000, compared to 45,000 the month before. Furthermore, the underemployment rate has hit a staggering 17.5 percent. Underemployment includes people who are working part time but would prefer to work full time.
That number also includes people who want work but have given up looking. Remember, the unemployment rate only includes people who are actively looking for jobs and collecting unemployment insurance. It doesn’t include those whose benefits have already run out. So those who are not collecting unemployment but still jobless and seeking work are included in the underemployment rate.
In short, 27.7 percent of Americans are unemployed or underemployed.
Still trying to help
The bill that extended unemployment benefits also extended the homebuyer tax credit. First time homebuyers can still receive $8,000 if they sign a sales agreement before April 30, 2012.
People who have owned their current house for five years or more can qualify for a $6,500 credit. The tax credit only applies to purchases of primary residences that cost less than $800,000. Also, only individuals with incomes less than $125,000 or couples with incomes less than $225,000 can qualify.
Who says things are getting better?
The consensus that the economy is recovering from the recession comes from the fact that the economy grew in the third quarter, which ended at the end of October. That means the gross domestic product grew over the three month period preceding that.
Economists are referring to the period we’re going through now as a “jobless recovery,” but some experts, including CNN columnist Colin Barr, say a jobless recovery is no recovery at all. Barr writes:
But so far there is no sign of an employment turnaround — and without one, and soon, all the other gains could prove fleeting. … But so far there is no sign of an employment turnaround — and without one, and soon, all the other gains could prove fleeting.