Unemployment in the U.S. currently stands at an eye-popping 9.4%, and the annual average unemployment in 2010 was 9.6%. That means that nearly one in 10 Americans who wants to work is unable to find a job.
The situation is particularly rough on the “99ers,” Americans who have been out of work for over 99 weeks and have therefore lost unemployment benefits that have expired. Recently, the 99ers have been in the news as the government struggles to define its role in helping the long-term unemployed.
Against this backdrop, literally millions of Americans want to know: Is unemployment getting any better?
Historical Unemployment Rates.
To put today’s woes in perspective, some historical context: For the past 50 years, the average rate of unemployment was 5.7%. According to standard economics, 5% is recognized as the “natural rate” of unemployment. Our record high was 10.8% (hit in November 1982) and the record low over that time period was 2.5% (hit in May 1953). As a more recent comparison, we hit a recession high of 10.1% in October 2009, compared to a low of 3.9% in late 2001.
We’re In The Process Of Recovery.
As we stand here today, we’re a lot like an accident victim: We’ve stemmed the worst of the bleeding and now we’re in the slow and painful process of recovery. At the height of the collapsing job market in January 2010, we saw more than 775,000 jobs lost per month. In the most recent data most recent data, we saw 297,000 new jobs added last month.
When Will Things Get Better?
Traditionally, if unemployment dips below the “natural rate” of 5%, economists worry that about wage inflation (as employees would have more power than employers). Some economist feel that thanks to globalization, 6% is the new 5% for natural rate of unemployment. Regardless, the only way for us to reclaim that rate and send the roughly 14 million Americans unemployed in 2009 back to work is for new jobs to be added.
Watch The Monthly Jobs Figure.
A key long-run data point to watch when it comes to the state of unemployment is the Bureau of Labor Statistics’ monthly jobs figure. In the short-term, a key news items to monitor is whether or not Congress decides to extend unemployment benefits to 99ers.
Although economic recovery will likely take a while yet, keep watch over unemployment rates and don’t lose hope if you’re unemployed yourself. With recovery should come better employment statistics—and opportunities.