Joblessness continues to challenge dollar-rich US
The US may be using unconventional methods to keep its dollar firm against the emerging economies, but on the domestic front all its plans to deal with a grim jobless scenario seem to have come a cropper.Updated: Sep 07, 2013 10:29 IST
The United States of America may be using unconventional methods to keep its dollar firm against the emerging economies, but on the domestic front all its plans to deal with a grim jobless scenario seem to have come a cropper.
Experts say at the current rate of unemployment crisis, the US won’t be able to regain its pre-recession level in the near future.
The jobless rate inched down marginally in August from 7.4% to 7.3%, as per the US bureau of labor statistics.
The US economy added a paltry 169,000 jobs. "At this rate, it would take until well into 2021 to fill our gap of 8.3 million jobs and return to a
healthy labour market," said economic policy institute economist Heidi Shierholz.
The US jobs market has been struggling for years now, since the economy tanked at the end of 2007 and sparked a global economic downturn. While a number of metrics have improved, the jobs crisis remains unsolved, with 11.3 million unemployed and millions more "underemployed" -- a term defined as part-timers seeking full-time work.
"Furthermore, though the unemployment rate dropped in August, it was for all the wrong reasons," she said.
The labour force participation rate dropped to 63.2%. Noting that unemployment figures do not include individuals not seeking work, she calculated that if the missing workers had been added to the equation, the jobless rate would stand at 9.5%.
Brookings institution senior fellow Justin Wolfers said jobs growth remained weak despite what seemed good news on the surface.
Growth in July was revised downward from 162,000 to 104,000 new jobs, with June also seeing a downward revision.
"Taken together, this month' s revision means we've created 74,000 fewer jobs than previously believed," he said. Echoing the sentiments of other economists, he said: "The decline in the unemployment rate isn't due to folks getting jobs. Instead, it's due to people dropping out of the labour force."
"Bottom line, this report says that we're barely creating enough jobs to keep the unemployment rate falling from its current high levels," he said.
"Policymakers have been looking for a signal that the recovery has become self-sustaining. This report doesn't provide it.
First Published: Sep 07, 2013 10:25 IST