As reported in this November 5th, 2010 CNNMoney article, the labor market is showing signs of improvement. Even though the unemployment rate is unchanged at 9.6%, there was an increase of 151,000 jobs in October. That was more than double than what economists predicted, so that's a good sign. However, we are going to need consistently higher job growth numbers in order to see the unemployment rate drop. Most economists feel that we need to be around the mid-250,000s to see a significant decrease in the unemployment rate because the labor force typically grows each month.
While there was considerable improvement in the private sector, the public sector is continuing to show weakness. On the positive side, private businesses started rehiring and created over 159,000 jobs. As for government jobs, they continued their decline this month with 8,000 jobs lost during this period. That is not surprising since many states continue to be strapped for cash as previous declines in economic activity caused their revenues to decline. In order to balance their budgets, many are resorting to downsizing their departments and cutting services.
Another key unemployment measure, which actually might be more accurate, also declined slightly from 17.1% to 17%. The Bureau of Labor Statistics also calculates an underemployment rate, which captures workers that are marginally attached to the labor force. This attempts to count discouraged workers, who want a job but are no longer seeking a job, along with involuntary part-time workers, who prefer to work full-time. These individuals are considered unemployed in this measure.
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