Shrinking Labour Force Keeps Unemployment
Rate Steady
An exodus of discouraged searchers from the
job market kept the unemployment rate from
climbing above 10 percent. Had the labour force
not decreased by 661,000, the unemployment
rate would have been 10.4 percent. The number
of discouraged searchers rose to 929,000 last
month.
Source: Bloomberg, January 9, 2010
What is a discouraged searcher? Explain how an
increase in discouraged searchers influences the
official unemployment rate and the R5 unemployment rate.
Use the following news clip to work Problems 6
and 7.
Firms Struggle to Hire Despite High
Unemployment
Matching people with available jobs is always difficult after a recession as the economy remakes itself.
But labour market data suggest the disconnect is
particularly acute this time. Since the recovery began,
the number of job openings has risen twice as fast as
actual hires. If the job market were working normally,
openings would be filled as they appear. Some 5 million more would be employed and the unemployment
rate would be 6.8%, instead of 9.5%.
Source: The Wall Street Journal , August 9, 2010