The Labor Department reported today that unemployment has risen in 27 states between July and August. The only two states that have reported a significant increase are Maryland and Florida. Nevada had the highest rate in August, which was 14.4 %. Following Nevada is Michigan, at 13.1% and California at 12.4%. North Dakota is staying strong with an unemployment rate of 3.7%. North Carolina created the most jobs in August, with 18,600 nonfarm payroll positions. At the other end of the scale, employers in Michigan cut the most jobs, slashing 50,300.
Since we are in a recession, here we see that the actual unemployment rate has risen above the natural rate of unemployment. Job search (fricitonal) and wage rigidity (structural) have to do with the high rates of unemployment that we still have. The states with high unemployment rates are dealing with about 7-9% of cyclical unemployment, when we don't want cyclical to be above 5%.
Increase job training, decrease unemployment insurance will be a good method to reduce the frictional unemployment rate. For the structural unemployment, reduce wages will work.
ReplyDelete