Unemployment Rate Begins to Rise Again
Reversing recent trends and defying analyst expectations, unemployment rose to 9.8% in November as the economy failed to produce adequate jobs to lower the unemployment rate.
A recent report, issued by the Bureau of Labor Statistics at the Department of Labor, indicated that the economy added 39,000 jobs in November 2010. In order to keep up with population growth, the economy must add at least 100,000 jobs per month to lower the rate of unemployment, according to a recent report by the Federal Reserve Bank of San Francisco.
Although the recession in business activity officially ended in June 2009, the economic recovery has failed to reduce the national unemployment rate, which continues to hover close to 10%. In some parts of the country, unemployment remains several percentage points above the national average, e.g. Nevada - 14%, California and Michigan - 12%. The unemployment rate for Pennsylvania is approximately 8.5% and approximately 11% for Philadelphia.
The prospect of another "jobless recovery" means that although national economic activity may increase in the near future, the unemployment rate may remain the same or increase. By one estimate, the economy must create 18 million jobs by 2015 to return to historically normal levels of unemployment.
Gross national product and productivity are growing at more than 2% annually. Corporate profits in the third quarter of 2010 were the highest ever recorded, following seven quarters of continuous growth.
Despite these trends, job growth remains lackluster and real wages are not growing substantially. In October 2010, real wages fell .1% according to a report by the Bureau of Labor Statistics.
With these economic conditions, it is not surprising that poverty is on the rise. The Census Bureau's latest report indicated that 14.3% of Americans (43.6 million people) were living in poverty in 2009, the highest percentage since 1994. A recent study by the Congressional Budget Office found that the poverty rate would have been 1.1% higher (approximately 3.35 million people) if extended unemployment insurance benefits had not been provided in 2009.
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