May Joblessness offers Glimmer of Hope

The United States Labor Department reported over the weekend that 345,000 job were cut by employers in May 2009, which has created an average 9.4% unemployment rate. However, for the last six months, joblessness had increased by twice that much per month. The total is also one-third less than most economists expected. They expected that unemployment was slowing down, but the lower number was a welcome surprise. (This is where you imagine a bunch of economists going out for drinks to celebrate.) Job losses for March and April were down a total of 82,000. However, now joblessness has an even lower monthly total, bringing us six digits or more lower than previous months.

The automotive industry lost 30,000 more jobs, also lower than previous months, and the average workweek is still downgraded, suggesting that employers are cutting hours and wages rather than handing out pink slips. Challenger, Gray, and Christmas, an outplacement firm that specializes in jobless and workforce research, reported that surveys indicated over half of employers were cutting salaries and wages rather than workforce, reminiscent of the woman in the debt relief commercial whose hours were cut in half. (“Half. I can’t pay half of my bills though, “ she said.) Unfortunately, that does suggest that this woman’s fictitious situation is a reality many people are still living in. Relief is in sight, as even these reports are showing that these are also slowing trends.

The Labor Department reported yielded some very good news as well. Joblessness in construction, retail, professional and business industries are at the lowest this recession has seen, indicating some industries are recuperating nicely. Temporary help services are not seeing payroll cuts, a 90% decrease in negative reporting from the average of the last six months. Many economists are treating temporary service employment as a leading indicator as to the status and climb of the economy. It seems to be a precursor to full job creation. Leisure and hospitality industries averaged a 39,000 job cut over the last six months, but now it has stayed static.

In the near future, we can expect job losses to keep dwindling, though most experts are calling for the unemployment rate to jump over 10% before we see major improvements. Due to the differing economies and job markets in different states, we will also not see even job creation and drops in unemployment in all states at one time as a whole. IHS Global Insight, a “critical information and insight” research corporation, believes that states like Texas, Oklahoma, and Utah will see the quickest recovery, while states that rely on technical labor like Michigan, Ohio, and Indiana may have a slower recovery, likely taking a few years.