Archive for Unemployment

Unemployment Continues to Drop

The number of Americans seeking unemployment benefits fell last week to the lowest level in four years, strengthening evidence that our job market continues to improve.  The Department of Labor also confirmed that the U.S. economy grew by 3% in the fourth quarter of 2011. From December through February, businesses added an average of 245,000 jobs per month. This has caused the unemployment rate to drop to 8.3 percent, the lowest level in three years.

According to the Labor Department the number of people applying for weekly unemployment benefits fell by 5,000, to a seasonally adjusted 359,000. This marks the lowest number of applicants since April 2008.

The four-week average of jobless claims, which is a less precarious metric, declined to 365,000 — the fewest for that measure since May 2008.

When applications for unemployment benefits decrease in a consistent trend below 375,000, it is generally a sign that hiring is sufficiently robust to bring down the unemployment rate. The current decline has coincided with the best three-months of hiring in over two years.

Many economists predict yet another strong month of hiring in March.

In assessing jobless claims, Ian Shepherdson, an economist at High Frequency Economics said “The trend remains unambiguously downwards.” While he admitted that the rate of decline was slowing, he pointed out that it was “still consistent with robust, sustained payroll gains.”

In Thursday’s assessment of the October-December quarter, the Commerce Department reported no change. The 3 percent annual rate remained the highest since spring 2010. Still, economists expect growth has probably slowed to 2 percent or less in the current quarter.

Businesses have been restocking their inventories at a slower rate, and shipping a lower amount of durable manufactured goods. In addition, Europe’s debt crisis and slowed growth in Asia have dampened demand for American exports.

Yet despite promising trends overall, Washington State residents still face troubling rates of unemployment, as well as difficulties in the workplace such as wrongful termination, workplace discrimination, trouble collecting workers compensation benefits, and the complexity of handling a Labor & Industries Claim (including, for many, the need to appeal a rejected L&I claim). Since a large number of injured workers do not fully understand their rights, they are taken advantage of when they attend an L&I Independent Medical Exam. If you need help with any of these issues, contact an L&I Lawyer or a Seattle Employment Attorney at Emery Reddy today.

Jobs Reports Offer Peril and Promise for Obama and Rivals

Friday’s news that the private sector added 227,000 jobs in February gives President Obama a renewed opportunity to boost his slow political recovery.

However, eight more jobs reports will follow in the months leading up to Election Day in November, each one an uncertain and potentially dangerous political moment for both President Obama and his Republican rivals.

Any given report could bring news of a slower pace of job growth and an uptick in the national unemployment rate, which is currently 8.3%. Conversely, gains in the labor market could continue to push the unemployment rate down, while boosting confidence in prospects for private sector job creation.

This uncertainty is the catch.

For President Obama, the last two months have supplied better news than expected in job creation numbers. Combined with a drop in the unemployment rate, last month’s jobs report caused Obama’s approval rating to rise and provided raw material for a new sense of optimism from the president and his administration.

Friday morning’s news will certainly encourage more positive rhetoric from the president. “Over the last two years, we’ve created over 3.5 million jobs, just in the private sector,” Mr. Obama said at a fund-raiser in New York last week. “Manufacturing is stronger than it’s been since the 1990s. We’ve now had 10 consecutive quarters of growth.”

The hopeful figures released in last month’s report gave Obama and his allies a potent political weapon. The evidence of economic improvement – even though it remains modest at this point –has deflated the rhetoric of Republican presidential candidates, especially Mitt Romney.

But just as quickly, a disappointing jobs report could shift political momentum in favor of the Republicans.

Alan B. Krueger, chairman of the White House Council of Economic Advisers, acknowledged this risk in a statement Friday morning.

“The monthly employment and unemployment numbers can be volatile, and employment estimates can be subject to substantial revision,” Mr. Krueger said. “Therefore, as the administration always stresses, it is important not to read too much into any one monthly report; nevertheless, the trend in job market indicators over recent months is an encouraging sign.”

Mr. Romney, who has largely based his campaign platform on claims that he can fix the economy, would benefit from some new ammunition to attack. Obama’s policies. Indications that U.S. growth is sputtering again – which will remain a distinct possibility in the face of rising oil prices and economic uncertainty in Europe – could lend new urgency to Romney’s arguments. It would certainly be injudicious for Romney to be seen as rooting for a slowdown; but if one happens, he will inevitably seize on it.

It is hard to foresee exactly how these trends will affect Washington workers; the state unemployment rate currently stands at 8.6%, as compared to 8.3% nationally. However, the state budget crisis could easily trigger more job loss among government workers.

Unfortunately, Washington residents not only feel the continued squeeze of unemployment, but also face additional struggles within the workplace itself, such as wrongful termination, workplace discrimination, obstacles in collecting workers compensation benefits, and the difficult gauntlet of managing a Labor & Industries Claim (including the need to appeal a rejected L&I claim). Many injured workers do not fully understand their rights, and find themselves taken advantage of when they attend an L&I Independent Medical Exam. If you face any of these issues, please contact an L&I Lawyer or a Seattle Employment Attorney at Emery Reddy today.

Hiring Trends Show Progress Toward a Labor Recovery

American companies boosted hiring in February, strengthening expectations that the labor market’s recovery has shifted into a higher gear. Data released Wednesday, followed by more this morning, revealed that wages grew faster at the end of last year than originally estimated, providing welcome news for consumers, but indicating a potential inflation problem for the Federal Reserve.

Last month the private sector added 216,000 jobs, according to the ADP National Employment Report. This exceeded economists’ predictions for a gain of 208,000.  “After two years of expansion without much gain in employment, we’re finally hitting the point where firms need to begin adding people in order to meet increased orders,” said Steve Blitz, senior economist at ITG Investment Research in New York. “There are still risks ahead, but if you could just stop the clock right where we are now, you’ve got a recovery that is gathering some momentum; it appears to be self-reinforcing.”

The Federal Reserve watches unit labor costs closely for signs of inflation, and noted that these rose at an annual rate of 2.8% in the fourth quarter, revised sharply up from the 1.2% pace reported Labor Department last month. Third-quarter wage growth increased to a 3.9% pace from the previously reported drop of 2.1%.

Workers received more promising news than they’ve seen in some time: hourly earnings (adjusted for inflation) rose at a 2.8% rate in the fourth quarter, revised from the previously reported increase of 1.0%. This marked the most substantial gain since the second quarter of 2010.

Wednesday’s data also revealed that consumer credit expanded sharply in January for the 5th consecutive month as Americans borrowed money to purchase cars and pay for education.  However, separate reports on housing suggested that this sector remained in a slump. Home prices fell another percent in January, the sixth straight month of declines as sales of distressed properties took a toll.

Despite the promising trends, many American continue to suffer from unemployment or underemployment. There have also been a number of troubling stories in recent news regarding wrongful termination, denied L&I claims, unsound practices during the independent medical exam, and other difficulties that workers face in navigating the Department of Labor and Industries. If you need expert help to appeal a rejected L&I claim or recover your full workers compensation benefits from Washington’s L&I, contact a Seattle Employment attorney or an L&I Lawyer at Emery Reddy.

Secretary of Labor Hilda Solis Reports Good News on October Employment Figures

Line at a job fair in New York, October 2011

On November 4, Secretary of Labor Hilda Solis issued the following statement on the October 2011 Employment Situation report:

“Our nation’s labor market posted stable growth in the month of October. The economy added 104,000 private sector jobs last month, and we also added 102,000 more jobs than had previously been reported in August and September. The unemployment rate dropped to 9 percent, its lowest level in six months.”

One issue that Solis emphasized was the improving situation of the “long-term unemployed” – those workers who have been without work for 27 weeks or longer.  The number of Americans in this category fell by 366,000 in October, which represents the biggest decline since 1948. Further good news came with the improved employment figures for African-Americans: unemployment in this demographic fell a full percentage point to 15.1 percent, its lowest level since August 2009.

The U.S. created 2.8 million jobs over 20 consecutive months of private sector growth, which includes one-million-plus jobs this year alone.  Third-quarter GDP growth stood at 2.5 percent, signaling the most rapid rate of improvement in over a year — and almost twice that of the previous quarter.  As Solis noted, employers reported “significantly fewer layoffs in October.”  “Consumer and business spending are both up, reflecting Americans’ increased confidence in our recovery progress,” she said.

Yet for many Americans, this good news seems wholly unrelated to their own circumstances. Workers in government and construction, in particular, continue to suffer high job losses.  As Solis pointed out, both of these are areas where passage of the American Jobs Act would have a direct and immediate effect on job creation. “Overall, non-farm payroll added 80,000 jobs in October, reflecting the loss of 24,000 government jobs and 20,000 jobs in construction,” she stated.  “Last week, the Senate voted down provisions of the American Jobs Act that would have helped keep teachers, police officers and firefighters on the job. This week, the Senate voted down a common-sense infrastructure bill that would have put hundreds of thousands of construction workers back on the job. We cannot allow political partisanship to hamper the vital functions of our communities.”

Despite the fact that many Americans are disappointed in the pace of the recovery, and an overwhelming majority continue to report that the U.S. is headed in the wrong direction, Solis maintains that “the policies [the Obama] administration has pursued have added jobs back into the economy,” and that the main problem lies with the “failure of Congress to pass legislation to put Americans back to work. However, even in the absence of action by Congress, job growth since April has averaged 90,000 jobs, compared to the 11,000 monthly average during the Bush administration.”