Creeping Unemployment Rate Points to Still Unsure Job Market as Manufacturing, Construction and Credit Sectors Still Lagging
There are still plenty of reasons to worry about trends in the labor market, and hardship they are causing for workers in key parts of the economy. Even with the up tick last month, job growth has slowed. The economy added an average of 97,000 jobs a month in the 3rd quarter of 2007 as compared to 202,000 jobs a month last year at this time.
The slowdown is in large part due to a contraction in construction and manufacturing, which continued to shed jobs in September and have each dropped more than 100,000 jobs since January. The housing crunch has also sliced payrolls by 30,000 in the lending and mortgage sector since July. With new housing construction stalled, employment in these sectors is unlikely to recover soon.
The slowdown in growth is now showing up in the unemployment rate, which has creeped back up to 4.7%., the highest rate since August of last year. If job growth does not pick up steam, the unemployment rate will continue to increase and cut off demand needed to keep the US out of a recession.
The increase in unemployment so far has occurred among workers with a high school degree or less, as college educated worker’s employment has held steady overall. For example, the unemployment rate for workers without a high school degree now stands at 7.4% up from 6.5% a year.
This steep increase is particularly troubling given recent data from the GAO, which found that such low-earning workers were only a third as likely to receive unemployment benefits as high wage workers. Congress is currently considering legislation (S. 1871) to spur major improvements to unemployment program that would close these gaps.