November 18, 2022

US Unemployment Rates Far Higher Than Predicted

The United States is seeing a much higher unemployment rate than predicted by economists. While the number of jobs are up for grabs, there are not enough qualified candidates to fill them. This has caused our unemployment rates to be far higher than anticipated at 4% – which is two percentage points higher than what was predicted in December 2018.

When we look at this unemployment rate and compare it to past years, the current figure is the highest for this time of year since 1990, three decades ago. The last time we saw a rate close to this was in the 1970s when the unemployment rates were around 5%. Not only is our current unemployment figure concerning but also has not been this high for this long since the last major recession, which occurred around 2008.

Data from the United States Department of Labor show that there are 728,000 open jobs in January 2019 with 5,826,000 Americans looking to be employed at this time. While our unemployment rate is still higher than it should be, things are getting better. Although the economy is growing, there are still many individuals not being able to find employment or are having issues holding onto their jobs with high turnover rates.

Although our unemployment figures have been high, the US has missed out on an incredible amount of opportunities due to lack of qualified applicants. Our unemployment rate would be even higher if employers were not able to find candidates who had the proper skills they were looking for, as many of those applicants would not have been considered “unemployed” per our government’s definition.

Our unemployment rate has long been thought of as a lagging indicator; this is because we typically see unemployment rates rise before job openings increase and fall before employment figures follow suit. This is due, in part, to the fact that once someone loses their job it typically takes them longer than average to find new employment (it can take up to six months), which lowers our unemployment rate without this change actually reflecting an increase/decrease in job opportunities.

Another factor that contributes to this lag time is that even when we see job openings increase, many employers find it difficult to find the right candidate to fill those positions. This is due in large part to a lack of applicants who have the necessary skills and experience required for these jobs, which could potentially lead to our unemployment rate staying at high levels through 2019.

This data may seem like doom and gloom but it is important that we do not lose hope. There are still many great opportunities for employment available and with the economy growing, so will our employment figures. Things may be a bit harder to find right now – but they are out there!

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