The Department of Labor released its August job numbers, and the aggregate unemployment rate remained the same from July. If you are an optimist, this means the economy has not gotten worse; but if you are like me, this is a sign that economy is still struggling. But, I always like to break down numbers into its roots to see what exactly the unemployment is derived from.
I looked at the numbers and here are some results:
- The unemployment rate for those 25 years or older, and have at least a bachelors degree is 4.3%. That is not a joke, the unemployment rate is half that of the national average.
- The telecommunications industry lost more than 47,000 jobs in the month of August.
But the news that there was no net job gain in the month of August made headlines this morning on cable news and really shook the confidence in the stock market. However, the numbers show a perfect tradeoff between the job separation rate of private and public sector workers. In August, 17,000 new private sector workers were hired whereas 17,000 public sector workers were laid off. This stat can be interpreted by some as when the government becomes smaller, it allows for more room in private industry to grow and absorb the unemployed government workers. At face value, you can come to that conclusion. However, the areas where the private sector is growing is different from where the public sector is shrinking.
34,000 new jobs were created in the health service industries throughout the month of August. Professional and business services saw 28,000 jobs added (accounting, architecture, administration services, computer IT work, etc.). The government subtracted 17,000 jobs throughout August. 15,100 educational workers lost their job in the month of August. Out of that number, 13,700 were at the local level (most likely to be teachers), and 1,400 at the state level. Almost 89% of all laid off government workers in the month of August were in the education sector, with almost 81% coming at the local school level.
It is a problem that the private sector areas that are growing and the public sector fields that are seeing job losses are completely different. Those working in the field of education cannot be absorbed as an architect by the private sector because the worker has a different skill set than the job entails. Due to the discrepancies in skills, the job search will be a painful one. There is a mismatch in the job market that will cause prolonged unemployment.
