U.S. Unemployment drops to 7.8%. excellent news, Obama on right track;Canadian unemployment rises.

The U.S. Bureau of Labour Statistics has released the latest unemployment numbers for September and they are good ones. They show a long awaited (and as I have been arguing) fall in the unemployment rate to below 8 % , 7.8 % in fact. This is excellent and very timely news, in the light of the political and policy debate now underway in the United States. The economy is not out of the woods yet but gradually healing and a few more months like this we should see unemployment fall below 7.5 % and perhaps lower. When we look at the fine details of the report some revealing data become available.

For example, contrary to what some spin masters on the Republican side are claiming you can first of all be certain that the report is unbiased and professional and non partisan. The Bureau of Labour statistics is very reliable and professional as is our own Statistics Canada.

In terms of the numbers according to the report total employment increased in September and the employment to population ratio now stands at 58.7 %. Part-time workers rose from 8 to 8.6 million, essentially because there were still not enough full time jobs coming on stream to absorb all of those workers who would prefer to work full rather than part time. The broad measure of unemployment U6 which includes both discouraged workers, part time workers, and all those marginally attached to the labour force fell to 14.7 % down from 16.4 % a year ago. Non farm payroll employment rose by 114,000 as compared to the average in 2012 of 146,000 per month.
In 2011 the monthly increase averaged 153,000 a month. there were upward revisions to previous monthly reports and it is plausible that this months report will also be revised upwards. so overall slow progress but progress nonetheless. If we break down the unemployment data further we see that the unemployment rates for those 16-19 are far higher than those 20 and above and white persons’ unemployment is much lower than the rate for black and Hispanic people. Asian people also have lower rates of unemployment.

Unemployment rates by Category Sept. 2011 &Sept 2012

Sept.2011                Sept.2012

Black workers                  15.9 %                    13.4

White workers                    7.9                          7.0

Hispanic                                11.3                       9.9

Asian                                      7.8                       4.3

White men  20+                    7.7                        6.6

White women 20+               7.1                          6.3

White 16-19 years old         21.2                       21.2

Black 16-19 yrs.old              43.6                        36.7

The above data show us the emerging structural nature of  some of the unemployment as aggregate demand grows and continues to absorb both new workers and previously unemployed ones there will be structural challenges in terms of youth and in terms of other factors like education , skill set and racial and linguistic discrimination. After the election is over the challenge will be to drive unemployment down below 5 % and adopt special programs to deal with the special circumstances of youth and minorities.

Canada’s unemployment rate for September, 2012 however rose from 7.3 to 7.4 %. Unemployment jumped to 8.0 % in Quebec from 7.6 % in August while the rate in Ontario fell to 7.9 % from 8%. the rates in the other provinces were as follows: Newfoundland 12.3 % (12.7 5 in Aug.); PEI 9.1 % from 9.6%; Nova Scotia, 8.6 %(9.7 % Aug.); New Brunswick 11.0% from 10.4 %; Manitoba  5.0 % (5.4 % Aug.); Saskatchewan. 4.7% (4.4% Aug.) Alberta 4.4 % (4.4% Aug.) Alberta 4.4 %(4.4%Aug.) B.C. 7.0% (6.7% (Aug.)

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About haroldchorneyeconomist

I am Professor of political economy at Concordia university in Montréal, Québec, Canada. I received my B.A.Hons (econ.&poli sci) from the University of Manitoba. I also completed my M.A. degree in economics there. Went on to spend two years at the London School of Economics as a Ph.D. student in economics and then completed my Ph.D. in political economy at the University of Toronto. Was named a John W.Dafoe fellow, a CMHC fellow and a Canada Council fellow. I also was named a Woodrow Wilson fellow in 1968 after completing my first class honours undergraduate degree. Worked as an economist in the area of education, labour economics and as the senior economist with the Manitoba Housing and Renewal Corporation for the Government of Manitoba from 1972 to 1978. I also have worked as an economic consultant for MDT socio-economic consultants and have been consulted on urban planning, health policy, linguistic duality and public sector finance questions by the governments of Manitoba, Saskatchewan,the cities of Regina and Saskatoon, Ontario and the Federal government of Canada. I have also been consulted by senior leaders of the British Labour party, MPs from the Progressive Conservative party, the Liberal party and the New Democrats on economic policy questions. Members of the Government of France under the Presidency of Francois Mitterand discussed my work on public sector deficits. I have also run for elected office at the municipal level. I first began to write about quantitative easing as a useful policy option during the early 1980s.
This entry was posted in austerity, Canada, classical economics, deficit hysteria, deficits and debt, full employment, labour market clearing, Uncategorized and tagged , . Bookmark the permalink.

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