The U.S. unemployment rate is steadily improving. In June, Gallup measured the unemployment rate at 6.9%.
Gallup reports that the unemployment rate in the United States for the month of June was 6.9 percent. The percentage of underemployed workers for the same month was 16 percent. The payroll to population percentage for June was 44.9 percent. These numbers represent the United States’ economy’s continual slow ascent out of the crippling recession that peaked in 2008. Job numbers are extraordinarily important to economists as they provide a very broad picture of what is happening in the economy. Investors also follow job figures closely as these numbers serve as strong indicators as to how the Federal Reserve will act in the near future.
Gallup’s numbers are based on the percentage of adults age 18 and older who are not disabled. The term “unemployed” refers to poll respondents who do not work, but are ready and able to work. The term “underemployed” refers to poll respondents who have part-time jobs, but desire to work full time. Both statistics are calculated in terms of their percentage of the United States’ entire workforce. Payroll to population refers to people who are employed for a minimum of 30 hours per week. This statistic is measured as a percent of the country’s entire working age population that is not disabled. It should be noted that these statistics are not seasonally adjusted.
According to the U.S. Labor Department, employers added 195,000 workers in the month of June. This data is just a bit higher than the 165,000 figure that economists had predicted. It is consistent with the May and April new job numbers of 195,000 and 199,000, respectively. While the numbers represent a movement in the right direction, they also characterize how painfully slow the economic recovery has been.
This slow recovery pace will likely not be enough to force the Federal Reserve’s hand in terms of maintaining stimulus efforts. The Federal Reserve plans to cut down stimulus programs later in 2014. The Federal Reserve will likely put an end to its $85 billion per month bond buying efforts. These efforts could come to an end within the next two months. Leading economists believe that the central bank will cut monetary easing when unemployment hovers around the 7% level for an extended period. It is widely thought that the Federal Reserve internally estimates that the unemployment rate will settle around this 7% level or possibly even lower over the course of the next year.
The economy only grew by 1.8% in the first quarter of 2014. So the unemployment rate is slowly decreasing but the economy is not growing at a fast enough pace to exit recovery mode and return to normal. The good news is that fewer people are out of work. The bad news is that the recovery appears to have stagnated, and the economy isn’t growing fast enough to decrease unemployment at the target rate.
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