Another week of unemployment data brings some welcome news for prospective job seekers and anyone who is anxiously awaiting the end of company announcements of mass layoffs. The U.S. Department of Labor report on claims for unemployment showed a drop to 381,000 claims, the lowest since February and nearly 23,000 less than previously reported. The number of people making initial claims for benefits declined amid what also appears to be a steady decrease in company layoffs. Although recent reports of layoffs at Citigroup, AstraZeneca and McGraw-Hill are still troubling after-effects of the economic recovery, these layoffs are smaller than similar layoffs that have resulted in tens of thousands being let go at Bank of America or in the public sector at the federal, state or county level.
The State of Unemployment
The report from the Labor Department also reported that the four-week moving average decreased to 393,250 from 396,250 , a sign that the trend is headed in the right direction and appears to be sustaining itself, absent large numbers of layoffs. The states that posted the largest declines in claims for benefits include; California, Texas, Florida, South Carolina and New York. While each state reports its own comments, the overall sentiment was that the service sector was laying off fewer people in these states. For the states that experienced the greatest increase in claims for benefits; Wisconsin, Michigan, Iowa, Indiana and Ohio led the pack. Comments from these five states were fairly consistent – construction industry layoffs as winter approaches generated the most terminations. Overall, 39 states reported a decrease in claims while 14 states and territories announced an increase in claims for benefits. The states are on the frontlines of paying unemployment benefits, and as a feature on Bloomberg detailed the federal government continues to provide extended and emergency unemployment benefits to those people who have exhausted their state benefits.
Uncertainty for Employee Payroll Taxes
The current payroll tax reduction of 2 percent is scheduled to expire on December 31st unless the President, democrats and republicans are able to reach a deal before then. One of the scenarios includes a modification to the tax relief by providing employees a 1 percent reduction and employers getting a 3.1 percent reduction to help stimulate job creation and stem the tide of corporate layoffs. An example of how local communities, employers and employees would benefit was provided by the White House during a stop in Scranton, PA recently.Scranton/Wilkes-Barre has the highest rate of unemployment in the Commonwealth of Pennsylvania and stands out as an area that while resilient over several decades of shifting jobs from manufacturing to the service sector, has nonetheless experienced a significant decrease in employment opportunities in general.
Jobs Good, No Jobs Bad
For all of the government data that reports how many people are working or not working or which companies are laying off and which companies are not – it really comes down to something very basic for most job seekers. Where are the jobs that we keep hearing about? What are the jobs that we keep hearing about? Why don’t I have one of these jobs? This economic recovery has gone on for so long now – the end of the recession was called in June 2009 – that after more than two years of struggling to get back on their feet, the unemployed just want a job. With health benefits and a retirement plan, if possible. People want to get back to work and to restore some normalcy to their lives and their pocketbooks for that matter. If it takes a payroll tax cut, another stimulus plan or a few more years of ‘fits and starts’ – then let’s get on with it. Now.