Economic Indicator: Unemployment Rate
This past year, dealing with COVID-19 was extremely traumatizing for many citizens across the United States. With the closing of stores, malls, and even grocery stores, people were being laid off left and right. This led to a record level of unemployment — with April of 2020 recording the highest unemployment rate since the post World War II era — a whopping “14.4%.” Now, we appear to see a light at the end of the tunnel and this is why.
The unemployment rate began to drop after that April high and it has fallen at a fairly steady pace since then. The unemployment rate is starting to look better as this pandemic keeps going on. The national unemployment rate as of this month is “5.4%” which is “0.5%” lower than the previous month. How we calculate the unemployment rate is by dividing the number of unemployed persons (which is determined by the people of working age who are actively trying to find work and cannot) by the number of persons in the labor force. After that then we end up multiplying that figure by 100.
COVID-19 is still very much present in day to day activity and that doesn’t necessarily show in the labor market, but that does not mean that the landmark record of unemployment is going down. Many workers are still scared to go to work — some are autoimmune compromised and feel uncomfortable in the workplace, others need to stay home to take care of their children, and some are not going back if they are being forced.
On the other hand, there is still some hopeful news regarding the unemployment rate. According to a Reuters article titled “U.S. labor market powers ahead with strong job gains, lower unemployment rate”, Brian Bethune, a professor at Boston College, stated, “We are charting new economic expansion territory in the third quarter.” This means that in the months of July, August, and September (which is the third quarter of the standard calendar quarters that make up the year) which means that the economy is rebuilding slowly but surely. He also made it clear that “the overall momentum of the recovery continues to build,” which is great news for the United States.
The job market seems promising as Reuters explained that “data for May and June were revised to show 119,000 more jobs created than previously reported.” This is a step in the right direction, since COVID-19 took so many people’s jobs away.
President Biden even had some words on what he thinks about the unemployment rate. Since he has taken office “he has helped create” close to 4 million jobs — but he came into office at a time when 4 million new jobs were being created. The Pew Research Center showed how from “February 2020 to February 2021, a net 2.4 million women and 1.8 million men left the labor force — neither working nor actively looking for work — representing drops of 3.1% and 2.1%, respectively.” President Biden tweeted “it’s historic — and proof our economic plan is working.” It is historic that so many jobs have been created in such a short amount of time, but he did come into office while those jobs were starting to be created.
With jobs being generated on the daily it is opening a lot of new doors for many people. There will be brighter days ahead and people can already see that with the unemployment rate decreasing.
