Some Good News Regarding Unemployment Rates

Some states have posted net gains to their employment numbers this past month.  Most notably, Michigan, which still has the highest unemployment rate at about 15%, has begun to cool down a bit, gaining nearly 40,000 jobs in October.  Other states that have been faring poorly, like Nevada, also showed some modest gains.  But one question lingers in the face of this positive growth and apparently good news- is this a result of seasonal hiring or perhaps the result of people no longer being counted as officially unemployed because they can no longer claim unemployment benefits?

This question, among others related to the question of economic instability is an important one to ask.  Sure there will likely be a very short, temporary surge in employment during the holiday season, especially in states where the unemployment rate really spiked early in the recession and now fewer and fewer people are eligible for unemployment benefits.  These holiday jobs may help to pay the bills, but they may also help to camouflage the dire situation at hand- these jobs will go away in January, and even more people will be out looking for some sort of employment to help make ends meet.

Many companies hire during the holiday season.  These companies do not have to provide temporary workers with benefits or other incentives that full time workers receive.  They also do not have to give them a good reason to let them go, as the first 90 days of employment are dependant upon the employer’s acceptance of the worker, and the employer can let a worker go for any reason within this time period.  This pattern of seasonal hiring has helped many companies survive over the past couple of years, and it continues into the holidays.  Sure many people will get a few extra bucks to help shore up the losses over the holiday season, but look for some real severe employment cuts come January.

The small respite we Americans have come to recognize as the beginning of the recovery is but a blip on the radar screen.  The eye of the storm has come and once the holidays have passed so will that eye.  There will be more job losses and economic bad news in earl 2010, the numbers don’t lie.  The recovery has not yet begun, and if it has, it’s going to be a jobless recovery like the past two or three we’ve had over the last two decades.

In order for Main Street to recover they need jobs.  There has been a temporary gain in jobs in a dozen or so states, but look for these jobs to disappear as fast as the wrapping paper on the millions of presents that will be sitting under the trees of million of Americans on Christmas Day.  The big picture is going to get worse before it gets better, as the numbers are showing.  The eye of the storm has arrived, but there will be more economic hardships on the other side of the holidays, even with the “good” news that has surfaced in the past couple of weeks regarding unemployment figures.