Unemployment Rate Rises to 6.1%

The unemployment rate rose from 5.7 to 6.1 percent in August, and non- farm payroll employment continued to trend down (-84,000), according to the Labor Department.

In August, employment fell in manufacturing and employment services, while mining and
health care continued to add jobs. Average hourly earnings rose by 7 cents,
or 0.4 percent, over the month.

Over the past 12 months, the number of unemployed persons has increased by 2.2 million and the unemployment rate has risen by 1.4 percentage points, with most of the increase occurring over the past 4 months. Which happens to coincide with the period of Fed slowing of the money supply.

The job losses in August came in every sector, with manufacturing and business services the hardest hit.

In August, the unemployment rates for adult men (5.6 percent), adult women
(5.3 percent), whites (5.4 percent), blacks (10.6 percent), and Hispanics
(8.0 percent) rose, while the jobless rate for teenagers was little changed
at 18.9 percent. The unemployment rate for Asians was 4.4 percent in August,
not seasonally adjusted.

Conclusion: If the Fed continues its tight money policy, the unemployment number is lkely to continue to climb, perhaps to double digit levels.

Jobless Claims Fall for 3rd Straight Week

The number of people signing up for jobless benefits declined last week, the third straight drop from a six-year high reached earlier this month, according to the Labor Department.

Applications for unemployment benefits dropped to a seasonally adjusted 425,000, down 10,000 from the previous week.

Overall, though, the jobless rate remains high. There were 332,000 initial claims for benefits in the year-ago period. Futher, the number of people continuing to receive unemployment also rose to 3.4 million, up 64,000 from the previous week and the highest level in almost five years.

A Labor Department analyst said, accordng to AP, that the impact of a recent Labor Department outreach program (The department began an outreach effort in late July to notify people of a 13-week benefit extension approved by Congress in June) has largely faded, playing only a small role in unemployment claims this week.

Reich Is 2 for 2

Left-wing economist Robert Reich has written another semi-reasonable commentary. If he keeps this up, we may have to give him the Left Wing Economist Who Makes the Most Sense Award, for 2008.

In this episode, Reich explains why many who are laid off do not collect unemployment payments. He then explains how this scenario comes about because of changes in the structure of the labor market,a labor market that has changed dramatically over the years.

It's solid theoretical analytics by Rech. However, he does not provide any data backing up his very reasonable claim.

But, at this point we must part from Reich for other reasons. He who would like to see the entire structure of unemployment benefits changed so that those currently not receiving unemployment payments are included in a restructured unemployment program.

We, on the other hand, would simply like to see the entire unemployment program shut down.

Reich's full commentary is here.