Podcast: Discussing the September Employment Report and What It Means For the Economy
I’m Michelle Bazie. Today, the Labor Department issued numbers on the employment situation in September. Chad Stone is the Center’s Chief Economist. He joins us every month to explain the numbers and he’s here with us today.
1. Chad, today’s jobs report shows that employers eliminated jobs for the 21st straight month in September. The unemployment rate inched up from 9.7 to 9.8 percent. We're seeing other signs that the economy is starting to recover, but the job numbers seem like a stubborn hold out. What does the slight increase in the unemployment rate reveal?
A: It shows that employers will need stronger evidence of a reviving economy than they have seen so far before they start actually adding workers to their payrolls. In the early stages of a recovery, employers are more likely to work their existing workers harder than to bring new workers on. There’s a huge hole in the labor market and it will take some time for the labor market to recover. Now that said, we are experiencing a far slower rate of job loss than we were at the beginning of the year.
2. The jobs report isn’t the only way to determine if the economy is reviving. The preliminary report on the Gross Domestic Product, or GDP, will be released later this month. Do you have any thoughts on what this report will show?
A: Economic forecasters are predicting that the GDP will show that the economy began growing in the third quarter — so technically, the recession may have ended — but labor market conditions remain harsh for those struggling to find a job.
3. Federal Reserve Chairman Ben Bernanke stated that “it’s still going to feel like a very weak economy for some time as many people will still find that their job security and their employment status is not what they wish it was.” Do you agree with his statement?
A: Evidence from the last two recessions supports Bernanke’s observation. In the 1990-91 recession, the unemployment rate did not peak until 15 months after the recession had ended. In the 2001 recession, unemployment peaked 19 months after the end of the recession, and job losses did not bottom out for another two months after that.
4. The House recently passed legislation that added extra weeks of emergency unemployment insurance benefits for workers in high-unemployment states who will exhaust their existing benefits before finding a job. What else needs to be done to improve the situation for those that are unemployed?
A: Well Senate action is still necessary, and the Senate should act without delay. People are losing their benefits, they’re running out of them as we speak. In addition, Congress should extend the emergency unemployment insurance benefits enacted in the economic recovery legislation. Those benefits are now scheduled to expire at the end of this year and they should be renewed.
Thanks for joining us today, Chad.