The Labor Department reported on Friday that the nation’s economy added 204,000 jobs in October while the federal government shutdown aided in the unemployment rate rising to 7.3%.
Payrolls were significantly expanded in certain industries such as retail, hospitality, manufacturing and heath care, however the percentage of people in the workforce is now at its lowest level in 35 years. Many people have simply given up hope of finding a job.
According to John Silvia, chief economist at Wells Fargo, the job market is actually narrowing.
“There’s a smaller group of people working, but they are prospering,” Silvia said.
Statistics back up Silvia’s claim and the fact that there is a shift in the American economy towards higher skilled labor. According to government data, only 4% of college graduates were unemployed last month, compared to 11% of workers without a high school diploma.
Positive signs are being shown, including a very healthy demand for candidates with college degrees. In places such as the Washington area, firms are even facing a challenge of grabbing these graduate applicants before someone else does.
There are also many examples of employees leaving their jobs voluntarily for lateral movement, commonly referred to as “churn” – a characteristic of a healthy labor market.
However, for the country’s 11.3 million unemployed workers, the signs aren’t so positive. About one-third of these workers have been out of a job for six months or more.
A portion of the unemployed workers, 815,000 to be exact, were so crestfallen by their lack of prospects they had officially stopped looking for a job.
A report showed that 720,000 people, a remarkably large amount, left the labor force in October.
If any positive signs can be spun from these discouraging statistics, it is that the average length of unemployment has decreased from its 2011 peak of 41 weeks.
Labor Secretary Thomas Perez pointed to worker training as a necessity to ensure that businesses can fill open positions.
“I’m heartened by the numerous conversations I have with employers who say, “I want to grow my business,” Perez said. But they often add “too many people coming through the door don’t have the skills that I need.”
Dennis P. Lockhart, President and CEO of the Federal Reserve Bank of Atlanta, said last week that he does not expect the recovery to improve until next year – if even then.
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