Unemployment rate remained at 9.1 percent
16.2 percent are unemployed or underemployed
Last week’s jobs report documented that no net new jobs were added. The lack of job growth resulted from the small increase in private sector jobs being negated by the loss of public sector jobs. The unemployment rate remained at 9.1 percent and 16.2 percent for those who are unemployed as well as underemployed. According to the Center for Budget and Policy Priorities (CBPP), “most leading forecasters in government and out expect the unemployment rate to remain very high for the next few years.”
The jobs report “highlighted the critical need for policies to put people back to work.” President Obama will speak on September 8th about his plans to address the job crisis. His speech will be delivered in a year when Congress has focused far more on the budget deficit than the jobs deficit. If ever there was a call for action on jobs it was last week’s report.
Long-term unemployment is a precursor of homelessness. Over two-fifths (42.9 percent) of the 14.0 million people who are unemployed 6.0 million people have been looking for work for 27 weeks or longer. These long-term unemployed represent 3.9 percent of the labor force. Prior to this recession, the previous highs for these statistics over the past six decades were 26.0 percent and 2.6 percent, respectively, in June 1983.
Unemployment to Remain High
According to the CBPP, which prepared the chart on this page:
In its Budget and Economic Outlook: An Update (the so-called “August update”), the Congressional Budget Office (CBO) projected that the unemployment rate would not fall below 8 percent until mid-2014 and, even with the projected sharp drop thereafter, would not reach 5.2 percent (CBO’s estimate of full employment) until early 2017. The White House Office of Management and Budget has roughly comparable estimates in its Midsession Review that it released yesterday, including an alternative forecast incorporating new signs of economic weakness and showing the unemployment rate averaging 9.0 percent in 2012. As the chart shows, the excess unemployment associated with the 2007-2009 recession and subsequent protracted economic slump dwarfs that seen in the worst previous postwar recession of 1981-82.
To read more from CBPP on the recent jobs report click here.
