Unemployment dip unexpected
WASHINGTON – The nation’s unemployment rate unexpectedly fell below double digits in January for the first time since last September, to 9.7 percent, as the pace of job losses continued to drop, employers gave more hours to many workers, and manufacturing payrolls grew for the first time in three years.
But the encouraging signs, reported Friday by the Labor Department, were tempered by newly revised data that showed the country lost a staggering 8.4 million jobs in the last two years – about four times the net job losses in the deep recessionary period of the early 1980s and 1.2 million more than previously estimated.
The severe destruction of jobs since December 2007, when the latest recession officially began, means that it will take years for millions of distressed families – and the economy as a whole – to climb back from what is now being called the Great Recession.
“The crater we have is just incredible,” said Heidi Shierholz, a labor economist at the Economic Policy Institute, a liberal think tank in Washington.
Factoring in the growing U.S. population and new entrants to the job market, she estimated that employers would need to create, on net, more than 400,000 jobs a month over the next three years to fully recover the payrolls lost during the recession. By any measure, she said, that is a tall order, and employer payrolls are still falling, albeit by just 20,000 in January.
Despite the distance still to travel toward full recovery, the monthly report from the Bureau of Labor Statistics indicates an economy that is improving gradually. The household survey found that 541,000 more people were employed in January compared with December, and there were 430,000 fewer people who said they were unemployed last month.
That brought the jobless rates down for men and women, young and middle-age, high-school and college graduates, though the unemployment rate for blacks overall bucked the trend and edged higher, to 16.5 percent.
Another sign of continuing recovery was contained in the January data on the number of people who said they were working part-time because their hours had been cut or they couldn’t find full-time jobs. That number fell dramatically, to 8.3 million from a record 9.2 million.
Many employers have said they have been reinstating work hours and days that were slashed during the recession, a first step before businesses start to add new people to their payrolls.
This is “the most promising news out of today’s report,” said John Challenger, chief executive of the global outplacement firm Challenger, Gray & Christmas. “Overall, we are definitely heading toward a job market recovery.”
The Labor Department’s broader measure of unemployment and underemployment, which includes involuntary part-time workers and discouraged workers, fell to 16.5 percent in January from 17.3 percent the previous month. But in another measure of the distress in the labor market, the ranks of workers unemployed for six months or longer rose last month to a record 6.3 million people – 4.5 times the number just two years earlier.
The unemployment rate is expected to rise in the coming months as more workers return to the job market to search for employment.
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