The article begins by observance, the month of February 2009 alone 65,000, increasing unemployment rate to 8.1 % which is the highest in the meant times. The article further explains that from the year 2007 to march 6th over 4.4. Million jobs had been lost. Because of this recession that is taking place in the US currently. The form of unemployment being experienced and being discussed in this paper is due to depression in the market and is called cyclical unemployment. There are mass job losses in the economy. According to this article which used data from US economy analysis data shows that there is a major problem in the economy.
The article describes the astonishment of president Barrack Obama at the figure of job losses and the president congratulates Washington for having passed the economic stimulus which intends to jam start the economy, the president was speaking at Columbus Ohio, during police trainee graduation ceremony. The article quotes republican leader John Boehner of Ohio as having observed that there was a lot to be done in order to reduce the prospects of America of loosing more jobs savings, and tax cuts. According to the article unemployment rate that was focused was 8% however 8.1 % is far above this. Since the month of December to the month of February the country had lost over 1.9 million jobs. And the decline in December was one of the worst since 1949. Unfortunately the paper observes that the Federal Reserve does not expect the unemployment rate to come lower than 7% before the year 2011. This means that the economy may take some time to recover.
In other words, this type of unemployment is due to the fact that the total effective demand of the community is not sufficient to absorb the entire production of goods that can be produced with the available stock of capital. When businessmen cannot sell their entire output, their profit expectations are not fulfillment so that their reaction in the next period is to reduce their output. Obviously, when entrepreneurs, decide to reduce their production, some factors of production become unemployed. Since employment is the major source of income for a great majority of people, a fall in employment signifies a fall in their income.
The article explain further that the most hit industry was the services industry where 375,000 jobs were lost while good producing industries lost 276 thousand jobs. The unemployment for African American rose to 33.4% while teenage unemployment rose to 21.6%. The hourly earnings increased by 3 cents to 18.47 an hour, and the work period for a week remained 33.3 hours for the last three hours. Another form of unemployment that is being experienced according to the article is the increase of people working part-time employment while they prefer working fulltime.
The article, has quoted Gold Man Sachs, who stated that the index for hours worked by 0.7% as compared to other quarters. The article concludes by stating that 2.1 million people are attached to employment while actually they do not have the job.
References
Robb G. (2009); Payrolls sink 651,000; jobless rate soars to 8.1%: 2.5 millions jobs lost in last four months; market watch.