The national unemployment rate is a key factor followed closely by the business world, the markets, the politicians, and human resources professionals alike. Its monthly movements, both up and down, are closely scrutinized and influence a multitude of financial and business decisions. Much has been made of the rise of the national unemployment rate since 2000. Let’s put a little analysis to it and see where we stand.
America’s unemployment rate stands at 6.4 percent for June. That’s a rise of 2.6 percent from its low point of 3.8 percent in April 2000. As you recall, unemployment was this low around and near the Y2K scare. The cracks were beginning to show, however, as in March 2000, the official start of the dot-com bust.
Other factors since then include the start of a recession, a continuing market slide, the presidential election fiasco, September 11th, and some corporate scandals to name a few. These are significant events that would drive the unemployment rate up. Do all of these events justify such a rise? Some analysts say yes; some say no. The politicians are, well, the politicians.
In historical terms, the unemployment rate seems to fit right in the middle of the national statistics from the last 40 years. During this time, unemployment has been as low as 3.4 percent and as high as 10.8 percent, with the average over this span equaling 5.9 percent. Since August 1994, the national rate has edged higher than the average just four times, albeit recently. That’s the bad news. The good news is many labor analysts have predicted such a bump was going to happen prior to a better job-creating economy. Let’s hope they’re right.
Now, how do we compare globally to other nations’ unemployment rates? The Organization for Economic Cooperation and Development (OECD), along with the Statistical Office of the European Communities (Eurostat), are two organizations that work collectively to track the unemployment statistics of 27 member nations. Together, the uniform application of their definitions results in unemployment rate estimates that are more internationally comparable than those based on individual national definitions.
The following member nations are tracked: Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Italy, Ireland, Japan, Korea, Luxembourg, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Spain, Sweden, Switzerland, the United Kingdom, and the United States.
The latest statistics published by the OECD and the Eurostat are for April 2003. The April statistics include information from only 18 member nations at the time of this writing. The unemployment rates for these nations vary from 3.5 percent for Luxembourg to 20.2 percent for Poland. Meanwhile, unemployment in the United States was at 6 percent. Eleven nations that contributed to the data had higher rates than the United States, while seven nations were lower. The OECD total percentage average equaled 7.2 percent.
Though none of this excites us as to the direction of the United States unemployment rate over the last three years, it does help put a little perspective to the situation. The fact is that the unemployment rate is ever-evolving and isn’t at an unusual or unexpected level for such economic times and national circumstances. Yes, that’s a hard opinion to swallow when you’re unemployed and looking for work. However, though it shows we’re not in the best of situations, we’re certainly far from the worst of them. IBI