Question

What are some current trends in the labor market?What are the current unemployment rate trends?Describe the changes in percentage terms and relate the changes in employment to the growth of the U.S. economy between the two years of 2010 and 2017.

Answer 1

The labor market is showing the encouraging trends of upcoming job opportunities that is leading to the fall in unemployment rate up to 4.1%, by the end of 2017. It has caused the claims of unemployment benefits to come down in the USA. It is based upon the encouraging GDP growth rate in the USA that is 2.3% in the year 2017. It is the reason that Federal Reserve has raised the federal funds rate and tried to regulate the money supply in the economy.

In November, 2010, the unemployment rate = 9.8%

In November, 2017, the unemployment rate = 4.1%

In 2010, the GDP growth rate = 2.5%

In 2017, the GDP growth rate = 2.3%

Here, it is to be noted that GDP growth rate in 2009 was negative at -2.8%, so a growth rate of 2.5% in 2010 is the sign of coming out of negative growth rate in 2009, whereas the GDP growth rate in 2017 is an upliftment upon the already positively growing GDP in 2016 that was 1.6%.

The unemployment rate has come down significantly from 9.8% to the 4.1% in the month of Nov. 2017.

Change in unemployment rate = (4.1%-9.8%)/9.8% = -58.16%

Change in GDP growth rate = (2.3%-2.5%)/2.5% = -8%

Here, it is the consistent and positive GDP growth rate between the 2010 and 2017, that has contributed to the significant lowering of the unemployment rate in the USA.

References:

1. Labor Force Statistics from the Current Population Survey. https://data.bls.gov
2. Real GDP growth of the United States from 1990 to 2017. https://www.statista.com