Unemployment at National Level, Giving

¶ … unemployment at national level, giving a possible line of governmental action along a certain area of the GDP in order to reduce unemployment. Finally, the last part of the paper will offer an analysis of the impact of such action on the inflation.

The article of focus for this work is a CNN Money coverage of the latest report (Nov., 2009) on U.S. unemployment, covering the data up to October 2009: "Unemployment hits 10.2%"by Chris Isidore, CNNMoney.com senior writer.

The author speaks about the unemployment rate spiking from 9.8% in September to 10.2% in October, giving an overview of the situation after the 22nd straight month of job losses: the most recent estimation is of 190,000 net job loss in October (down from the 219,000 in September). Additionally, comments regarding the 3.5% GDP growth during the third quarter, for the first time in a year, were made, in an attempt to discern whether it is indeed a good sign, or just a "sugar rush GDP," as described other CNN Money related material (Isidore, Oct. 2009).

Another point deserving attention is the fact that the average workweek remains short when compared with historical standards, suggesting that many of the employed people work fewer hours than they would like to. Short work week says two things: distress for already cash-strapped workers and that is going to take some time before employers will start to hire again, as they will more likely first increase the hours of work for their underemployed people.

According to 24-7 Press Release report on U.S. unemployment, the top seven major industries hit by mass layoffs were:: construction; wholesale trade; transportation and ware-housing; real estate and rental and leasing; health care and social assistance; and accommodation and food services (2009).

One thing I would like to note when searching a possible focus GDP area for the government to address is that, without better job prospects, the consumers -- whose spending actually make up two thirds of the GDP, are going to remain tightfisted, thus slowing the healing of the housing and financial markets. Consequently, I believe that government actions aiming at increasing consumer spending should be / continue to be the main target in the months to come. Consumer spending will not increase though without more job certainty or a significant job creation activity. The president's stimulus package program have prove some positive outcomes in states like California, New York, North Carolina, but there are still a lot of white spaces on the map, where job creation and consumption stimulation has not been that efficient (Isidore, Nov. 2009).

In order to create programs that will put people back to work, one should look at real country needs, and I would propose some actions aiming at decreasing unemployment in construction or public sector, with a longer term objective: increasing consumer spending:

Upgrading country's crumbling infrastructure: some of the bridges across the nation are almost literally falling down or present high danger of collapse

Cities like New Orleans are in desperate need of increased federal assistance in order to rebuild, while states like Texas, Mississippi and Florida need help as they continue pummeled after the latest hurricanes

Creation of institutions like the old WPA and PWA (active during the Great Depression) to "alert and save people from death and providing for their immediate needs" (Koch, 2008) in order to commence rebuilding of devastated areas, thus addressing also the problem of unemployment (FEMA is an example of such currently active institution)

Addressing the northeast, building tracks and trains that could compare to the Japanese or French bullet trains, to link Boston to Washington, D.C much faster, could become a good timed cheaper investment in our infrastructure