Are Jobless Recoveries Really That Unusual? [Infographic]
By economists' determinations, the recent recession the nation endured beginning in December 2007 officially ended in mid-2009. But for many jobless Americans the pain still lingers. More than two years into the rebound, job creation remains tepid, leading some to refer to the current economic situation as a jobless recovery.
There are some bright signs on the horizon, however. As reported Thursday, weekly first-time claims for jobless benefits have been steadily trending downward for some time. At the height of the economic crisis, U.S. News & World Report notes, new weekly claims for unemployment rose to above 500,000 for more than a year, and for most of the first half of 2009 climbed to well above 600,000.
More recently, however, initial claims have routinely tallied less than 400,000 weekly, though that's a level well above what is considered healthy for the labor market.
Still, it isn't unusual for unemployment rates to remain high well after the economy appears on a path to growth.
A number of factors contribute to keeping jobless rates at sustained levels during an economic recovery. Those include discouraged job seekers who stop looking for work and are no longer counted among the unemployed. After the economy and employment prospects perk up, however, their numbers once again begin showing up in employment data as they resume searching for jobs.
More indicative of the current recovery is another factor: timid employers. Unsure of what the future holds, many companies hold off on hiring until an economic rebound appears more certain. Following the massive job cuts that took place just a few years ago, many companies have made do with smaller staffs, and many feel little reason to jump on the hiring bandwagon until they are sure the costs associated with taking on more workers can be justified.
Of course, those aren't all the only factors that contribute to keeping jobless rates high after recessions end. For more insights, check out the infographic below.
from Fisher Investments
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David Schepp has spent more than a dozen years covering business news for the electronic and print media, including Dow Jones Newswires, BBC News, Gannett Co., and most recently at AOL's DailyFinance. Nearly 10 years ago, he started writing a weekly People@Work column, looking in depth at issues facing workers in today's workplace. Follow David on Twitter. Email David at firstname.lastname@example.org. Add David to your Google+ circles.more...