Timetric: Unemployment in the US Economy

One of the most keenly awaited macro statistics in the USA is the monthly data on employment and unemployment. For some time there have been fears that the huge fiscal and monetary policy stimulus programs seem to have been having little effect on the jobless rate.

As we can see from the charts below there are tentative signs that a more durable economic recovery is setting across the Atlantic. The unemployment rate has fallen to a two year low, employment in private sector businesses is expanding and the steep fall in manufacturing employment seems to have come to an end (for now). Getting unemployment down is crucial for Obama with the next Presidential electoral campaign in view. And it is also important for the wider health of the world’s biggest economy.

One of the really striking things about the recent recession and weak recovery has been the dramatic increase in the mean duration of unemployment in the USA compared to previous bouts of cyclical unemployment. My third chart in this blog looks compelling and suggests that it has been really hard for those who have lost their jobs in the wake of the global financial crisis and the subsequent recession to find fresh work. Long-term unemployment is a structural problem in the labour market and it becomes harder to resolve as the length of time spent out of paid work grows month by month.

Unemployment and the unemployment rate

Data from Timetric.

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Labour Market: Employment Situation, US from Timetric

Private sector employment and manufacturing jobs

Data from Timetric.

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Labour Market: Employment Situation, US from Timetric

Average duration of unemployment in the US economy

Data from Timetric.

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Labour Market: Employment Situation, US from Timetric