Jobless Rate Lowest since March 2009Featured, Finance Saturday, December 3rd, 2011
In spite of a yet another European debt crisis and signs of a slowing down economy in China, the unemployment rate in the USA has dropped last month to 8.6%. That’s as low as the jobless rate has been in two and a half years, suggesting that the American economy may be getting better. For most of 2011, the unemployment rate was hovering around 9%. The unemployment rate has been above 8% for 33 months as of December 2011. The 120,000 odd new jobs created in November would have clearly played a role in this apparent ‘growth’.
The fact that roughly 315,000 people simply gave up looking for new jobs (and therefore not counted as unemployed) no doubt played a role in the apparent decline in the jobless rate.
Average unemployed period is 9 months?
It is estimated that the unemployed work force in the USA is around 13 million. The average period of unemployment for this group of people is a record high of 40.9 weeks. In other words, on average, these workers have been unemployed for ~41 weeks (approx 9 months).
Could more unemployment benefits (stimulus money) be the answer?
The whole idea behind stimulus money is to make people spend more. In that sense, unemployment benefits are known to have highly stimulative effects on the economy, as recipients are bound to spend most if not all of the benefits. Considering these observations, should President Obama use additional stimulus money (in the form of unemployment benefits) which will not only pump some $ through the complex network of financial pipelines but also help the 2012 presidential election.