Unemployment Current Unemployment the Current

Unemployment

Current Unemployment

The current global economic crisis has had a wide array of detrimental effects on the U.S. economy. One of the most major issues, however, has been the impact on the unemployment level. Jobs in most sectors have been reduced as capital became scarce and consumer spending dropped dramatically. Similar and even more complex factors are at work on the rate of inflation, which is also a very complex measure. In general, there has been an increase in inflation since last year, but both the immediate and long-term picture of inflation, as measured by the consumer price index, tells a somewhat different story. Simply put, the economic crisis has caused some unpredictable things to happen, and some unfortunately predictable ones, as well.

The unemployment rate in the United States was approximately eight-and-a-half percent (8.5%) as of March of this year, which is up four-tenths of one percent from the month before (April statistics are not due out until the first week of May). Nearly three hundred thousand workers lost there jobs in March due to mass layoffs from large companies. This number does not include other workers who became unemployed when they lost their jobs in smaller companies, or people who were self-employed or small business owners who are also out of work. Right now, the unemployment rate for March is higher than the annual unemployment rate has been since 1975, and it is still on the rise.

This rise in unemployment has been accompanied by a notable drop in productivity, which makes since given that consumers are buying less. The complex interactions of the elements of an economy can be seen at work here. Higher unemployment rates leads to decreased spending, as even people who are still in their jobs worry about the future. This leads to less demand, which leads to less profit and therefore less ability to pay employees, and the cycle continues.

Adding to all of this complex (and admittedly oversimplified) interaction is the factor of inflation. One common measure of inflation is the Consumer Price Index, which actually dropped by one tenth of one percent in March when compared to February. Prices dropped slightly in February also, and through most of the last quarter of 2008, but rose significantly in December and January. When food and energy -- two especially volatile and important price categories -- are removed from the picture however, prices actually rose two tenths of one percent in March. This is another sign that things are far more complicated than they seem.

According to the most recent news release from the Bureau of Labor Statistics, 299,388 worker lost their jobs in 2,933 mass layoff events (where fifty or more employees were let go from a single employer). This is one hundred and sixty four more mass layoff events than occurred in February, and the number of individual claims that has come as the result of these layoffs has increased by 3,911 -- this is not the number of claims, but the additional number of claims made in March as compared to February. This is also over one thousand more layoff events than occurred in the same month last year, corresponding to 137,891 more associated unemployment claims. The total unemployment rate of eight-and-a-half percent compares to a five percent rate for March of last year.