Podcast: Discussing the August Unemployment Report and What It Means For the Economy
I’m Michelle Bazie. Today, the Labor Department issued numbers on the employment situation in August. Chad Stone is the Center’s Chief Economist. He’s followed these reports for years and he joins us now.
1. Chad, today’s jobs report shows that the unemployment rate rose from 9.4 to 9.7 percent in August, reaching its highest level since June of 1983. Was this increase expected?
A: The unemployment rate rose a little more in August than some experts were expecting, but the fact that it rose was not really a surprise. If history is any guide, we should expect to see the unemployment rate keep going up even after the official end of the recession. Many people may think that the unemployment rate is a sign of how well the economy is doing. But in fact, it is a lagging indicator. While the economy is showing some signs of life, it’s likely to be awhile before we see a pickup in economic activity reflected in the employment reports.
2. The economic recovery legislation enacted earlier this year was designed to create jobs. Has it worked?
A: Before the legislation, there was a danger that we were on the brink of an economic abyss. Now, the labor market is no longer in a free fall, and it looks like the recovery legislation has played an important role in slowing the rate of job loss. We’re still in a deep hole, however. Employers remain reluctant to hire, and people who want to work remain discouraged about their prospects of finding a job. As a result, the percentage of Americans who have a job is lower than it has been at any time since 1984.
3. So Chad, it looks like we can continue to expect high unemployment rates, particularly in regards to long-term unemployment. In closing, is there anything that the administration or Congress can do to provide assistance to people looking for work and possibly boost economic activity?
A: Policymakers should renew the temporary Unemployment Insurance, or UI benefit programs, which expire at the end of this year. They should also consider additional assistance for job-seekers who have exhausted or will soon exhaust all their UI benefits in what continues to be a very harsh labor market, where a third of the unemployed have been looking for work for 27 weeks or longer.
Thanks for joining us today, Chad. We look forward to speaking with you next month.