The US unemployment rate has hit a 26-year high after 216,000 jobs in various industries were cut last month in August. Worse, the country’s Labor Department has revised the number of job losses in June and July, making the new number increasing by 49,000.
The new unemployment rate as of today is 9.7%.
If there is any consolation, the 216,000 job losses were not as severe as predicted by analysts, which was 225,000. It is in fact the lowest figure of job cuts seen so far this year. Now, people would ask, since the job losses number decreases, why the unemployment rate goes the opposite way?
2 months ago, the unemployment rate was 9.4%, which was slightly lower than the current 9.7%. However, in July, more than 70,000 job seekers had given up looking for vacancies due to extremely tough job market, and were hugely dormant. Now that the economy is swinging positively again, these 70,000 odd job seekers have been actively looking for opportunities.
Eventually, the US unemployment rate is expected to hit the dreaded 10% figure before the end of the year.
Since the recession started in late 2007, America has lost close to 7 million jobs, with the number of unemployed Americans now swelling up to about 15 million.