Jobs, Jobs, Jobs – The Mantra of the Current Season
September 7, 2011
The unemployment rate of the U.S. economy in August 2011 stood at 9.1%, a far cry from the 4.4% jobless rate seen in the last business expansion which ended in December 2007. The current elevated level of unemployment after two years of economic growth is unprecedented in the post-war period (see Chart 1). The high for the unemployment rate in the post-war period was recorded during the 1981-1982 recession when it touched 10.8% in December 1982. In this business cycle, the recovery commenced in November 1982 and by January 1985 (26 months of economic recovery/expansion) the unemployment rate had dropped to 7.3%. This time around, the high for the unemployment rate is 10.1% (October 2009) and the recovery is 26 months old with a jobless rate, as noted earlier, of 9.1%. Consequently, the level of concern about a persistently high unemployment rate has risen significantly.
Against this backdrop, President Obama is scheduled to deliver a speech about new proposals to create jobs in the economy on Thursday, September 8. Presidential candidates Mitt Romney and John Hunstman have their respective plans for increasing employment on the table. The principal consideration of these plans is how to increase the number of jobs in the economy. There are different explanations for the stubbornly high jobless rate across different segments of the population, implying that these plans have to include a range of options. Here is a summary table of selected unemployment rates to evaluate these job creation plans which will be part of policy and dinner table discussions in the near term.
