Unemployment Lower Than Forecast
The Labor Department released it’s April jobs report on Friday, which while was still a significant loss of jobs, was less than what many economists were forecasting.
Nonfarm payroll employment continued to decline in April (-539,000), and the unemployment rate rose from 8.5 to 8.9 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Since the recession began in December 2007, 5.7 million jobs have been lost. In April, job losses were large and widespread across nearly all major private-sector industries. Overall, private-sector employment fell by 611,000.
The country now has the highest unemployment rate since the recession of the early 80’s and employment is typically one of the last things to recover after a recession. It is expected to hit double digits even if economic growth returns to the positive side by the end of the year, like the Federal Reserve is predicting.
The long recovery that is expected to take place will likely see slow job creation at least initially. Manufacturers are still try to reduce inventory levels amid falling demand and it could be some time before production fully recovers.
The recently passed economic stimulus package is expected to created 2 to 3 million jobs over the over the next 3 years but that is still only half of the number of jobs that have been lost already and will likely be only a third of that number before employers starts to hire once again.
It’s going to have a serious impact on consumer spending over the next few years and this year’s stimulus payments will only give a boost for a few months at most. Despite all the money the government has already spent over the past two years, there will likely be pressure on Congress and the administration to create additional stimulus packages in the upcoming years in order to replace all the jobs that will have been lost after the recession finally blows over.
