Underestimated Unemployment

New Source: Associated Press
Date of Article: September 19, 2013
Author of Article: Christopher Rujaber
Title of Article: US Unemployment Benefit Applications Rise to 309K

As technology moves forward and innovations continue to develop, the unemployment rate increases as well, unfortunately. In a society that is constantly moving forward, one would think that the rate of employment would exponentially grow, with new products on the market, meaning more job opportunities. However, with the steady increase of inflation, people cannot seem to manage to find a job that offers steady pay.

The number of people seeking U.S. unemployment benefits rose fifteen-thousand last week to 309,000.  The Labor Department says that this data was not correct and that the four-week average fell seven-thousan to 314,750: the lowest in six years. California and Nevada claimed they were unable to submit all of their data due to computer upgrades, however, that does not change the fact that the number of people seeking U.S. unemployment benefits is the highest it has been in the past six years. A government spokesman says that those states reported all of the applications that came in last week. But backlogged date from two weeks ago may elevate the figures in the coming weeks, he said.

The broader trend in applications has been favorable, signaling fewer layoffs. The four-week average fell six percent in the two months before the computer upgrades distorted the numbers. As the layoffs are down, companies have yet to step up the rate of hiring. Employers have added an average of just 155,000 jobs a month since April. That is down from an average of 205,000 for the first four months of the year. This is one of the main contributing factors as to why the Federal Reserve on Wednesday help off slowing its $85 billion-a-month in bond buying. Those purchases are intended to keep mortgage and other longer-term interest rates low and encourage borrowing, spending, and growth.

Unfortunately, the economy grew at a whopping 2.5 percent annual rate in April-June quarter. That is too slow to generate hiring strong enough to rapidly lower the unemployment rate, which is still 7.3 percent higher than after the Great Recession ended. As consumers have grown more cautious about spending, higher interest rates have threatened to slow the housing recovery.

This article is especially important because it talks about where our economy stands today, and where it is going. It highlights how important it is for America to increase the overall unemployment rate and that if the rate does not increase, more people will be filling for US Unemployment Applications which will destroy the governments funds.