The 2014 unemployment rate is both good and bad news. While it has gone down to 6.7 percent, this is apparently due to people giving up on the US economy and leaving the job market.
As previously reported by The Inquisitr, the unemployment extension on benefits has been controversial, with President Obama urging it and some economists advising against it. Regardless, the US Senate is pushing for unemployment benefits for the long-term unemployed to be renewed.
When it comes to the unemployment rate, Bush and Obama have compared a lot in the past. The lowest point in President W. Bush’s eight years as President was 4.2 percent.
The transition between Bush and Barack Obama happened just as the effects of the Great Recession started to really take hold, so Bush left us with an unemployment rate of 7.3 percent even though 2008 started at 5.0 percent. The highest point under President Obama was at 10.1 percent in 2009.
As a solution, Congress passed a stimulus plan that was intended to reduce the US unemployment rate down to 5.0 percent by, well, 2014:
Obviously, since the US unemployment rate stands at 6.7 percent things didn’t go as planned. As it stands right now, the unemployment rate is about the same as it was in the fall of 2008. The major difference lies in how we got there.
The number of non-farming jobs increased by 74,000, which is the weakest beginning to a year since 2011. It was also reported the amount of hiring in December was the lowest it’s been in three years. At the same time, the labor force participation rate fell down to 62.8 percent, meaning 347,000 more people gave upon on finding a job at all.
So what is the cause of all this? Like with everything else, economists seem to think blaming the polar vortex is the best explanation:
“It looks like it’s a weather issue – a big drop in construction and a 1,000 drop in transportation. People will focus on the unemployment rate drop and the upward revision to the prior month.”
The only good news related to the changes in the unemployment rate is that US economic growth is expected to reach three percent in 2014, which is much higher than the 1.7 percent predicted for 2013. The average hourly income also increased by two cents and other economic indicators are positive.