Wednesday, June 2, 2010

Unemployment rates: An interpretation

Via Bureau of Labor Statistics:

Unemployment rates were higher in April than a year earlier in 291 of the 372 metropolitan areas, lower in 73 areas, and unchanged in 8 areas, the U.S. Bureau of Labor Statistics reported today. Fourteen areas recorded jobless rates of at least 15.0 percent, while 8 areas registered rates below 5.0 percent. The national unemployment rate in April was 9.5 percent, not seasonally adjusted, up from 8.6 percent a year earlier.

In comparison to a year earlier, the unemployment rates do seem to be more gruesome in the majority of the metropolitan areas. However, taking in consideration the lag of unemployment data and also the fact that the economy did not start improving until the beginning of the first quarter of this year, the rates do show that the economy is stabilizing and possibly improving from the worst period of the recession. This information along with the positive housing data seems to be the cornerstone for today’s market rally. The Dow closed with 225.52 points up, or 2.25% at 10,249.54; nevertheless, in my opinion, the positive sentiments of today might not be long lasting. It seems to me that many people expect the economy to improve without taking in full consideration its current condition. Although the bailouts have undisputedly brought positive effects to the economy such as the improvements of the unemployment situation, these effects are only temporary until the stimulus funds run out. In my opinion, in order to have a sustainable growth of the economy, more substantial policies must be introduced to create a more efficient environment that does not require government money to sustain it.

Full article on the Unemployment rate can be found on:

Luong Hai
Summer Analyst
Analyze Capital LLC

1 comment:

  1. I like your point about stimulus on the fiscal side, I'm in agreement with you on that point.

    Also good points about the nature of economic reports and their lag.

    And thank you for citing.

    Good post!


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