Unemployment and Inflation

Summary:

Even in the current sluggish economy of United States an online job listing company discovers that there are quite a few jobs which are available. This could potentially lower the unemployment rate for U.S which has been hovering over 9%. This is due to the mismatch of people not looking in job areas and locations where the opportunity currently exists. Although this process takes time there is risk of losing out the opportunity by the time one discovers it as the demand for such specialized skills can shift over time.

Analysis:

The tepid pace of US economy could make many people not be counted as part of the labor force. The drop in the labor force could be attributed to the drop in the number of people that are employed and unemployed. The unemployed people could drop since it counts only people who currently don’t have a job and are actively looking to work. Unemployed doesn’t count people who looked for job in the past but who are not looking currently. Such unemployed people are generally elderly population who would stop looking for work as many of them would consider going back to school as a waste of their talent. Such elderly unemployed people are also responsible for the increase of unemployment insurance where government pays for part of their expenses.

Although this constitutes a small proportion the increase in the unemployment rate comes from young people who are unemployed and figuring ways to get employed. Such educated young generation could be part of frictional unemployment which occurs when people get laid off from their current jobs in seek of new opportunities or take their time once they enter the labor force to find the appropriate job. Likewise, firms are also taking time to find the most suitable candidate for filling in open positions.

Another possibility of unemployment could be structural unemployment