More statistical detail was provided earlier this week about a troubling aspect of the U.S. unemployment problem: the number of open jobs has gone up a bit even as the already high jobless rate has risen.
The following numbers were provided by Narayana Kocherlakota, the president of the Federal Reserve Bank of Minneapolis, in the text of a speech he delivered Tuesday in Fargo, ND.
The Minneapolios Fed official was building on an earlier talk in which he cited the so-called structural unemployment issue, saying that up to one third of the 9.6% unemployment rate might be due to factors other than a flattish economy. Those could include a skills mismatch, a geographic mismatch and other factors.
In his big speech leading up to more quantitative easing by the Fed, central bank Chairman Ben Bernanke last week addressed the structural jobs issue, but concluded the “bulk” of unemployment is due to the fact that the economy isn’t growing much.
The reason this is important is that even in the best case monetary policy won’t be effective in solving tructural unemployment.
Kocherlakota on Tuesday added some statistical heft to the issue. The recession ended officially in June 2009. From that time through August 2010 “the demand for labor seemed to rise modestly,” said Kocherlakota.
In that period, he said, the job openings rate rose 26% and the layoffs rate fell nearly 18%. Still, the headline figure for unemployment ticked up to 9.6% from 9.5%. Also in the period, the percentage of the population with a job fell to 58.5% and labor force participation also slid.
“The failure of unemployment – and the labor market more generally – to respond to the modest increase in labor demand is deeply troubling,” the Fed regional bank president said.
Indeed.
