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The lesson summarizes the content of the October 3, 2008, U.S. Department of Labor, Bureau of Labor Statistics, announcement of the unemployment rate and employment data for the month of September, 2008. The meaning and importance of the data are discussed. Students consider the implications of the data for themselves, their community and the U.S. economy. Exercises are included for reinforcing knowledge of the concepts.

KEY CONCEPTS

Business, Business Cycles, Demand, Derived Demand, Economic Growth, Full Employment, Human Resources, Labor, Labor Force, Labor Market, Macroeconomic Indicators, Prices of Inputs, Productive Resources, Resources, Trade-offs among Goals, Types of Unemployment, Unemployment, Unemployment Rate

STUDENTS WILL

  • Review the most recently reported U.S. employment and unemployment data.
  • Determine the changes in U.S. employment and unemployment from August to September, 2008.
  • Identify the recent and historic patterns of changes in employment and unemployment in the U.S. economy.
  • Determine the factors that influenced the reported unemployment rate and implications for the future of the U.S. and world economy.

Current Key Economic Indicators

as of May 5, 2013

Inflation

On a seasonally adjusted basis, the Consumer Price Index for All Urban Consumers decreased 0.2 percent in March after increasing 0.7 percent in February. The index for all items less food and energy rose 0.1 percent in March after rising 0.2 percent in February.

Employment and Unemployment

Total nonfarm payroll employment rose by 165,000 in April, and the unemployment rate was little changed at 7.5 percent. Employment increased in professional and business services, food services and drinking places, retail trade, and health care.

Real GDP

Real gross domestic product increased at an annual rate of 2.5 percent in the first quarter of 2013 (that is, from the fourth quarter to the first quarter), according to the "advance" estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 0.4 percent.

Federal Reserve

To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens. In particular, the Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent...

INTRODUCTION

Each month the Bureau of Labor Statistics (BLS) Current Employment Statistics (CES) program surveys about 150,000 businesses and government agencies, representing approximately 390,000 individual worksites, in order to provide detailed industry data on employment, hours, and earnings of workers on nonfarm payrolls. The BLS then announces the monthly 'Employment Situation,' reporting the current employment and unemployment data estimates.

Date of Announcement: October 3, 2008:

U.S. Bureau of Labor Statistics: The Employment Situation, September 2008

"Nonfarm payroll employment declined by 159,000 in September, and the unemployment rate held at 6.1 percent.

Employment continued to fall in construction, manufacturing, and retail trade, while mining and health care continued to add jobs.

Unemployment (Household Survey Data)

The unemployment rate (6.1 percent) was unchanged in September, following a 0.4 percentage point rise in August. The number of unemployed persons was little changed at 9.5 million. Over the past 12 months, the number of unemployed persons has increased by 2.2 million and the unemployment rate has risen by 1.4 percentage points.

The unemployment rates for adult men (6.1 percent) and blacks (11.4 percent) rose in September. The jobless rates for teenagers (19.1 percent), whites (5.4 percent), and Hispanics (7.8 percent) were essentially unchanged. The unemployment rate for adult women declined to 4.9 percent, partly offsetting an increase in August. The unemployment rate for Asians in September was 3.8 percent, not seasonally adjusted.

In September, the number of long-term unemployed (those jobless for 27 weeks or more) rose by 167,000 to 2.0 million, an increase of 728,000 over the past 12 months. The long-term unemployed accounted for 21.1 percent of total unemployment in September.

Total Employment and the Labor Force (Household Survey Data)

The civilian labor force (154.7 million) and the labor force participation rate (66.0 percent) were essentially unchanged over the month. Total employment (145.3 million) and the employment-population ratio (62.0 percent) were little changed. Since a recent high in December 2006, the employment-population ratio has declined by 1.4 percentage points.

The number of persons who worked part-time for economic reasons rose by 337,000 to 6.1 million in September, an increase of 1.6 million over the past 12 months. This category includes persons who would like to work full-time but were working part-time because their hours had been cut back or because they were unable to find full-time jobs."

MATERIALS


Key Economic Indicators

as of October 3, 2008

Inflation

The Consumer Price Index for All Urban Consumers (CPI-U) decreased 0.4 percent in August, 2008, before seasonal adjustment. The August level of 219.086 was 5.4 percent higher than in August 2007.

Employment and Unemployment

Nonfarm payroll employment declined by 159,000 in September. The unemployment rate (6.1 percent) was unchanged in September, following a 0.4 percentage point rise in August. The number of unemployed persons was little changed at 9.5 million.

Real GDP

U.S. real gross domestic product increased at an annual rate of 2.8 percent in the second quarter of 2008.

Federal Reserve

At its September 16 meeting, the Federal Open Market Committee decided to keep its target for the federal funds rate at 2 percent.

PROCESS

What did the U.S. Bureau of Labor Statistics report about employment and unemployment in September, 2008?

BLS announcement: The Employment Situation, September 2008 (Reported October 3, 2008)

"Nonfarm payroll employment declined by 159,000 in September, and the unemployment rate held at 6.1 percent.

Employment continued to fall in construction, manufacturing, and retail trade, while mining and health care continued to add jobs.

Unemployment (Household Survey Data)

The unemployment rate (6.1 percent) was unchanged in September, following a 0.4 percentage point rise in August. The number of unemployed persons was little changed at 9.5 million. Over the past 12 months, the number of unemployed persons has increased by 2.2 million and the unemployment rate has risen by 1.4 percentage points.

The unemployment rates for adult men (6.1 percent) and blacks (11.4 percent) rose in September. The jobless rates for teenagers (19.1 percent), whites (5.4 percent), and Hispanics (7.8 percent) were essentially unchanged. The unemployment rate for adult women declined to 4.9 percent, partly offsetting an increase in August. The unemployment rate for Asians in September was 3.8 percent, not seasonally adjusted.

In September, the number of long-term unemployed (those jobless for 27 weeks or more) rose by 167,000 to 2.0 million, an increase of 728,000 over the past 12 months. The long-term unemployed accounted for 21.1 percent of total unemployment in September.

Total Employment and the Labor Force (Household Survey Data)

The civilian labor force (154.7 million) and the labor force participation rate (66.0 percent) were essentially unchanged over the month. Total employment (145.3 million) and the employment-population ratio (62.0 percent) were little changed. Since a recent high in December 2006, the employment-population ratio has declined by 1.4 percentage points.

The number of persons who worked part-time for economic reasons rose by 337,000 to 6.1 million in September, an increase of 1.6 million over the past 12 months. This category includes persons who would like to work full-time but were working part-time because their hours had been cut back or because they were unable to find full-time jobs."

What employment and unemployment data does the BLS report?

For the purpose of determining employment and unemployment data, the BLS definition of 'employment' is:

'Employment is the total number of persons on establishment payrolls employed full or part-time who received pay for any part of the pay period that includes the 12th day of the month. Temporary and intermittent employees are included, as are any workers who are on paid sick leave, on paid holiday, or who work during only part of the specified pay period. A striking worker who only works a small portion of the survey period, and is paid, would be included as employed under the CES definitions. Persons on the payroll of more than one establishment are counted in each establishment.'

The BLS reports the the size of the labor force, number of employed persons, number of unemployed persons and the number of persons not in the workforce for the nation, regions and states, and by industry and demographic groups. The BLS will also report wage and hour data.

What is the "unemployment rate"?

The unemployment rate is the percentage of the U.S. labor force that is unemployed. It is calculated by dividing the number of unemployed individuals by labor force. The labor force is the sum of the number of people who are unemployed and the number of people who are employed. See the current labor force and unemployment calculations in Figure 3.

An individual is counted as unemployed if the individual is over the age of 16 and is actively looking for a job, but cannot find one. Students, individuals who choose to not work, retirees, and those in institutions are not in the labor force, and therefore not counted in the unemployment rate. Table 1shows how the U.S. unemployment rate is determined for the month of September, 2008.

Figure 1:  Calculation of the US Unemployment Rate, Sept. 2008
Total civilian population   234,410,000   (excluding those under 16, members of the military, and persons in institutions)
- Not in Labor force**   79,628,000   (retired, students, individuals choosing not to work)
= Labor force   154,732,000   (total population minus those not in labor force)
- Employed   145,255,000   (individuals with jobs)
= Unemployed*   9,477,000   (individuals without a job and actively searching)
Unemployment Rate = 9,477,000 divided by 154,732,000 = 6.1%

 

 

[NOTE:

* Those under 16, members of the military, and persons in institutions, retired, students, individuals choosing not to work.
* * Individuals without a job and actively searching for work.]

Who are "persons not in the labor force"?

Not all potential workers are counted as part of the labor force. In September, about 1.6 million persons were "marginally attached" to the labor force. These people wanted to work and were available for work and had looked for a job sometime in the prior 12 months. They are not counted as unemployed in September because they had not searched for work in the 4 weeks preceding the BLS survey.

This number included 467,000 "discouraged workers." Discouraged workers are persons not currently looking for work specifically because they believe no jobs are available for them. The other 1.1 million persons marginally attached to the labor force in September had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities. (Source: BLS, Commissioner's Statement on the Employment Situation Press Release October 3, 2008 )

Also, the number of multiple jobholders fell by 398,000 in September to 7.7 million. Multiple jobholders made up 5.3 percent of all employed persons.

What are some recent and historical U.S. employment and unemployment data?

The next several figures provide pictures of the current and historical data. Figure 2 compares the unemployment rates of selected demographic groups from the October 3 BLS announcement. Note the difference in unemployment rates and rate changes for the various groups. The unemployment rate for most of the demographic groups increased, with the largest decrease (0.8 percent) for Black/African American. There was one exception to the August-September trend. The unemployment rate for adult women decreased by 0.4 percent.

Figure 2: Unemployment Rate by Demographic Group, Q2 - September 2008  

 

Q2 2008

Q3 2008

July 2008

August 2008

Sept. 2008

Change Aug.- Sept.

All Workers

5.3

6.0

5.7

6.1

6.1

No change

Adult Men

4.9

5.6

5.3

5.6

6.1

+ 0.5

Adult Women

4.6

4.9

4.5

5.3

4.9

- 0.4

Teenagers

17.4

20.3

20.3

18.9

19.1

+ 0.2

Whites

4.7

5.1

5.1

5.4

5.4

No change

Black/African Americans

9.1

9.7

9.7

10.6

11.4

+ 0.8

Hispanic or Latinos

57.2

7.7

7.4

8.0

7.8

- 0.2

Figure 3 summarizes the status of the labor force in September 2008, including the total size, employment, unemployment, and those not participating in the labor force. Note the decrease in the size of the civilian labor force and employment. The number of unemployed and those not in the labor force increased.

Figure 3: Labor Force Status, Q2 – September 2008 (thousands)

 

Q2

2008

Q3

2008

July

2008

August

2008

Sept.

2008

Change

Aug.-Sept.

Civilian Labor Force

154,294

154,730

154,603

154,853

154,732

-121

Employment

146,089

145,517

145,819

145,477

145,255

-222

Unemployment

8,204

9,213

8,784

9,376

9,477

101

Not in Labor Force

79,117

79,381

79,261

79,253

79,628

375

Figure 4 shows the changes in the U.S. unemployment rate from 1990 to the present. Note that the current unemployment rate of 6.1 percent is nearing the most recent rate high point of 6.3 percent in June, 2003.

Figure 4

Figure 5 traces U.S. unemployment rates back to 1948. Note the constant increases and decreases, reflecting business cycles, with periods of increasing and decreasing employment growth.

Figure 5

Figure 6 provides a picture of seasonally adjusted employment level in the U.S. from 1999 to the present. The longer-term trend has been one of continuous employment growth with shorter periods of slow growth or declines.

Figure 7 shows the monthly changes in employment from 1999 to the present in a bar graph. Again, note the growth cycles, up and down.

Figure 7

 What are "business cycles"?

The term 'business cycle' refers to fluctuations of growth and decline in the level of economic activity in an economy relative to its long-term growth trend. The cycle is made up of periods of growth of output (recovery and peak) and periods of relative decline (contraction or recession). These fluctuations in economic growth and decline do not follow any predictable time pattern in terms of enlight or severity.

"The National Bureau of Economic Research's Business Cycle Dating Committee maintains a chronology of the U.S. business cycle. The chronology identifies the dates of peaks and troughs that frame economic recession or expansion. The period from a peak to a trough is a recession and the period from a trough to a peak is an expansion. According to the chronology, the most recent peak occurred in March 2001, ending a record-long expansion that began in 1991. The most recent trough occurred in November 2001, inaugurating an expansion.'

The NBER defines a recession as 'a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough. Between trough and peak, the economy is in an expansion. Expansion is the normal state of the economy; most recessions are brief and they have been rare in recent decades."

The NBER reported on November 26, 2001, that 'the peak of economic activity had occurred in March of that year. The March 2001 peak marked the end of the expansion that began in March 1991, an expansion that lasted exactly 10 years and was the longest in the NBER's chronology. On July 16, 2003, the committee determined that a trough in economic activity occurred in November 2001. The trough marks the end of the recession that began in March 2001. The 2001 recession thus lasted eight months, which is somewhat less than the average duration of recessions since World War II. The postwar average, excluding the 2001 recession, is eleven months."

The NBER procedure for dating business cycles "follows standard procedures to assure continuity in the chronology. Because a recession influences the economy broadly and is not confined to one sector, the committee emphasizes economy-wide measures of economic activity. The committee views real GDP as the single best measure of aggregate economic activity. In determining whether a recession has occurred and in identifying the approximate dates of the peak and the trough, the committee therefore places considerable weight on the estimates of real GDP issued by the Bureau of Economic Analysis of the U.S. Department of Commerce. The traditional role of the committee is to maintain a monthly chronology, however, and the BEA's real GDP estimates are only available quarterly. For this reason, the committee refers to a variety of monthly indicators to determine the months of peaks and troughs."

The key factors in the NBER analysis are "two monthly measures of activity across the entire economy: (1) personal income less transfer payments, in real terms and (2) employment. In addition, the committee refers to two indicators with coverage primarily of manufacturing and goods: (3) industrial production and (4) the volume of sales of the manufacturing and wholesale-retail sectors adjusted for price changes. The committee also looks at monthly estimates of real GDP such as those prepared by Macroeconomic Advisers. Although these indicators are the most important measures considered by the NBER in developing its business cycle chronology, there is no fixed rule about which other measures contribute information to the process."

Source: The NBER's Recession Dating Procedure .

What industry groups are increasing and decreasing in employment?

(Source: BLS Establishment Survey Data)

The BLS also tracks employment by industry group. According to the September report, "employment continued to fall in construction, manufacturing, and retail trade, while mining and health care continued to add jobs."

  • Manufacturing: Employment fell by 51,000 over the month, bringing the decline in factory jobs to 442,000 over the past 12 months. In September, job losses continued in motor vehicles and parts (-18,000); this industry has shed 140,000 jobs over the past 12 months. Employment decreased in fabricated metals (- 7,000), wood products (-5,000), and furniture and related products (-5,000). In nondurable goods manufacturing, paper products (-3,000) and plastics and rubber products (-4,000) lost jobs over the month.
     
  • Construction: Construction lost 35,000 jobs over the month. Thus far this year, all of the components of construction have experienced employment declines; the majority of the losses have been in the residential components.
     
  • Retail Trade: Employment dropped by 40,000 in September and by 250,000 over the last 12 months. Department stores lost 11,000 jobs in September and 70,000 over the last 12 months. Employment also continued to decline in motor vehicle and parts dealers (-10,000); this industry has lost 48,000 jobs in the past 4 months. Gasoline stations also lost jobs in September (-6,000).
     
  • Transportation and Warehousing: Employment declined by 16,000 in September and by 57,000 since its peak 12 months earlier. Over the month, job losses occurred in trucking (-12,000) and air transportation (-5,000).
     
  • Financial Activities: Employment in financial activities fell by 17,000, with nearly half of the decline occurring in securities and investment firms. The financial activities industry has lost 172,000 jobs since its employment peak in December 2006.
     
  • Professional and Business Services: Employment continued to trend down over the month (-27,000), largely reflecting further job cuts in employment services. Computer systems design services and management and technical consulting services each added 9,000 jobs in September.
     
  • Health Care: Employment continued to increase in September with a gain of 17,000. Job growth in the industry averaged 30,000 a month over the prior 12 months.
     
  • Mining: In September, employment continued to grow in mining (8,000). Mining employment has expanded by 241,000 since reaching a low in April 2003.

What are the costs of unemployment?

There are significant personal costs to unemployment and these are the easiest to understand. Unemployed workers often do not have the income to support themselves or their families. The stress of being unemployed is reflected not only through the financial challenges of paying regular ongoing bills, but also through increases in alcohol and drug abuse, marital problems, and criminal activity among those who are unemployed.

State and federal governments reduce the personal financial cost of being unemployed through unemployment compensation provided to many unemployed workers. Because most workers pay the taxes that fund the unemployment compensation, the cost of being unemployed is spread among taxpayers, instead of having the entire burden fall on the unemployed workers alone.

Increases in unemployment also mean that the economy is wasting an important scarce resource – labor. Real GDP is less than it otherwise could be and that additional output is lost forever. If more individuals had been employed, production of goods and services would have been higher. Average standard of living is lower as a result of an increase in unemployment. Standard of living is generally defined by per capita GDP or per capita income. If incomes or output rises faster than the population, individual workers will have more income or can purchase more goods and services, on average.

What are the types of unemployment?

There are three types of unemployment, each of which describes the particular circumstances of the individual and their employment situation.

  • Frictional unemployment is temporary unemployment arising from the normal job search process. Frictional unemployment helps the economy function more efficiently as it simply refers to those people who are seeking better or more convenient jobs and those who are graduating and just entering the job market. Some frictional unemployment will always exist in any economy.
     
  • Structural unemployment is the result of changes in the economy caused by technological progress and shifts in the demand for goods and services. Structural changes eliminate some jobs in certain sectors of the economy and create new jobs in faster growing areas. Persons who are structurally unemployed do not have marketable job skills and may face prolonged periods of unemployment, as they must often be retrained or relocate in order to find employment.
     
  • Cyclical unemployment is unemployment caused by a drop in economic activity. This type of unemployment can hit many different industries and is caused by a general downturn in the business cycle. Lower demand for goods and services reduces the demand for workers.

At the levels of unemployment that economists consider to be the lowest possible sustainable levels (discussed below), the only unemployment that exists is due to friction in labor markets and structural changes in the economy.

What is "full employment"?

Economists define the approximate unemployment rate that is 'full employment'. If unemployment falls to a very low rate, there will be upward pressure on prices. If unemployment rises to a very high rate, there will downward pressure on prices or prices will remain steady. In the middle is a level, or more likely a range, where there is not pressure on wages to rise or fall. That is the full employment rate of unemployment.

Economists do not agree or know for certain what that rate is and it does change over time. A consensus estimate is that the full employment rate of unemployment is currently between 4.5 and 5.0 percent of the labor force being unemployed. Economists often use as a benchmark the "full employment GDP." This is the estimate of the potential output of the economy with full employment.

What does it mean when the data is "seasonally adjusted"?

Short-run trends in labor force are influenced by seasonal and periodic fluctuations associated with recurring events such as weather, holidays, and the opening and closing of schools. Seasonal adjustment eliminates the influence of these fluctuations and makes it easier for users to observe fundamental changes in the level of the series, particularly changes associated with general economic expansions and contractions.

At the end of each calendar year, BLS updates the seasonal adjustment factors for the labor force data derived from the Current Population Survey (CPS), or household survey. This past year, seasonally adjusted data for January 2007-November 2007 were subject to revision. The rates were unchanged in 7 of the 11 months in 2007 and changed (increased) by one-tenth of a percentage point in the months of June, July, August and October.

For a more full explanation of the seasonal adjustment process, see the BLS article Revision of Seasonally Adjusted Labor Force Series in 2008 .

What happened to weekly hours worked and wages in September?

The BLS reported, "In September, the average workweek for production and non-supervisory workers on private nonfarm payrolls fell by 0.1 hour to 33.6 hours, seasonally adjusted. The manufacturing workweek decreased by 0.2 hour, and factory overtime decreased by 0.1 hour.

The index of aggregate weekly hours of production and non-supervisory workers on nonfarm payrolls fell by 0.5 percent in September to 106.3 (2002=100). The manufacturing index decreased by 1.0 percent to 89.6.

In September, average hourly earnings of production and non-supervisory workers on private nonfarm payrolls rose by 3 cents, or 0.2 percent, to $18.17, seasonally adjusted. This followed gains of 6 cents in July and 8 cents in August. Average weekly earnings were $610.51 in September. Over the past 12 months, average hourly earnings increased by 3.4 percent and average weekly earnings rose by 2.8 percent.

In September, on average, the workweek was shorter and wages increased. The "average" worker worked slightly less, but earned slightly more per hour. Is the average worked keeping up with inflation and maintaining his or her standard of living? Some are and some are not.

What does this data mean?

The October 4, 2008, New York Times headline read "159,000 Jobs Lost in September, the Worst Month in Five Years." Peter S. Goodman reported that September was the worst month of retrenchment in five years. He added that this report was "amplifying fears that an already painful downturn had entered a more severe stage that could persist well into next year."

“It’s a dismal report, and the worst thing about it is that it does not reflect the recent seizure that we’ve seen in the credit markets,” said Michael T. Darda, chief economist at MKM Partners, a research and trading firm in Greenwich, Conn. “There’s really nothing good about this report at all. We’ve lost jobs in nearly every area of the economy, and this is going to get worse before it gets better because the credit markets have deteriorated basically on a daily basis for the last few weeks.”

Didn't the government financial market bailout work?

“At best, the bailout stops a much deeper decline in activity,” Mr. Darda said, “but it’s not like they’re going to do this and all of the sudden the clouds part and the skies are clear.”

The story went on to generalize that "most economists have concluded that the economy will struggle well into next year. More pessimistic forecasts envision the economy remaining weak through most or all of next year."

“This is an economy in recession, and every dimension of the report confirms that,” said Ethan S. Harris, an economist at Barclays Capital. “This has been preceded by a slow-motion recession. Now we’re going into the full-speed recession that will last somewhere between three and five quarters.”

"As the impact of Wall Street’s distress ripples out, economists expect opportunities to grow leaner still. On Friday morning, banks needing to borrow from other banks were paying nearly 4 percent more in interest than the Treasury offers on savings bonds — a spread reflecting a general unwillingness to part with cash. That spread was wider than after the 1987 stock market crash."

“It sets us up for some really grim news in the immediate future,” said Robert Barbera, chief economist at the research and trading firm ITG. “Credit was already hard to get in early September. But it’s really impossible to get now.”

“This economy is just not creating near enough economic activity to generate wage or income growth,” said Jared Bernstein, senior economist at the labor-oriented Economic Policy Institute in Washington. “That has serious living standards implications.”

An October 4, 2008, Chicago Tribune story quoted one analyst who echoed the thoughts of many. "As bad as the September job numbers were," said Bernard Baumohl of the Economic Outlook Group, the situation "is likely to get much worse in the months ahead."

All of these comments seem quite pessimistic and suggest that a recession is looming or already here - despite the recently reported small increase in per capita GDP. The loss of 159,000 jobs in the economy affects not only 159,000 workers, but all of those who might produce and sell goods and service to those workers. It reflects pessimism among employers who will not risk hiring new workers and purchasing new capital.

ASSESSMENT ACTIVITY

Teachers: Have your students click on the start button below to assess their knowledge of the unemployment lesson.

CONCLUSION

The good news is that the U.S. unemployment rate did not increase in September. Or is it good news?

The simple unemployment rate - the percentage of the labor force who are unemployed - does not tell us everything.

The labor force is smaller. 159,000 U.S. jobs disappeared in September - 2.2 million more people were unemployed in the past year.

Those who are unemployed have spent a longer time looking for employment. More people are seeking part-time work, even if they would like to work full-time.

It looks like many workers have left the labor force; either from feeling discouraged or just giving up.

Minorities have been disproportionately affected by the downturn as their unemployment rates have increased more than average.

All of this has serious implications for the health of the U.S. economy.

What do you think?

EXTENSION ACTIVITY

Discussion: What do you think the unemployment data tells us about state of the U.S. economy?

[Possible Answers:

This may be evidence that the economy as slowed. Whether or not it means that the U.S. is in or near a recessionary period is inconclusive, but strongly suggested.

Confidence in the health and future of the economy may worsen. Consumers may be less positive about their future income and producers may be less likely to make investments in future production.

Unemployment reduces income tax revenues and increases the cost of programs such as unemployment compensation.

When incomes are reduced by increased unemployment, consumer purchasing will decrease. This may have a ripple effect in the economy, affecting the demand for labor by companies that produce goods for consumers.

If output falls, demand for other productive resources by producers will likely decrease.]

Go to the BLS report, "Employed and Unemployed Persons by Occupation, Not Seasonally Adjusted ."

Look at the data for various sectors/occupations. Students can examine the data to identify trends over the last year. What occupations have grown more than others?