The economics of unemployment and inflation Rates.
.
INTRODUCTION.
This paper analyses the rates of unemployment and inflation in the United States. The U.S Bureau of Labor Statistics and the Economic report from the president. Has provided the data used for analysis.
- THE UNEMPLOYMENT RATE.
- Summary of the unemployment rate.
The bureau of labor statistics is an agency that has been tasked to do a data collection across the country on the various pillars of the economy e.g., businesses, arrange and analyze the data and provide a justifiable report for the government to act.
As of 2019, there are a total of 7.8 million unemployed people in the economy. Due to the corona virus pandemic (COVID-19) pandemic, the rate of unemployment across the country has increased to 4.4% as per the report released in April2020.The adult women unemployment rate rose by 4.0% in March and 3.1% in February; teenagers 14.3% in March and in February 11.0%; the blacks had an employment rate of 6.7% in March and 5.8% in February; Hispanics6.0% in March and 4.4% in February and finally for the whites 4.0% in March and 3.1% in February.The significant differences in rates of unemployment between the months of March and February show the adverse effects of COVID-19 in various sectors of the economy.
- Difficulty in determining unemployment.
It is important to understand who is qualified and open to working in order to measure the unemployment rate. The total number of Americans is divided into three social problems. A social occasion includes people under the age of 16 and systematic people. The second assembly, called “outside the work unit,” is composed of adults who are potential workers but who do not seek work for any reason, age, school, or housewife (Nilsen and Reiso, 2011). The third assembly is the work unit, people who are deployed, and people who are unemployed, but who are not looking for a successful job. These three genders are challenging to understand, and, as the inevitable minimum of basic unemployment changes without friction, it is difficult to choose the total unemployment rate. For example, If an individual quits a job and is on the process of finding another job, they are considered unemployed.
- Unemployment as an economic problem.
Fundamentally, the financial issues seek identified estimates of how assets are moving efficiently and appropriately from place to place and for adjustments being made, for instance, when crude oil is extracted, and the end is taken into the refinery. If there is more unemployment, this means that there are less development and measures in trade and the production of these products (Nilsen and Reiso, 2011). This is due to several things, including fewer products sold, which means less development. Although the unemployed earn less money, government revenues are reduced because there is no tax on offers and wages.
- None economic effects of unemployment.
Unemployment affects the individual, his family, and, over time, the general population in which he lives. Unemployment brings agony, misery, and agony. It makes individuals live a life in a way they never anticipated. The future becomes predictable when individuals can meet their basic needs (Nilsen and Reiso, 2011). In simple words, unemployment causes health problems, domestic problems, and poor quality in the lifestyle of an individual.
- Who loses from unemployment?
Everyone loses unemployment because it is usually a job loss. Creditors lose out on expansion because the liquidity estimate they receive is reduced, and the less authentic estimate is obtained when the security is repaid.
In concluding this chapter, the data has provided a very important view on the impact that COVID-19 has had on the economy. The major lesson learned from this chapter is that there is a significant correlation between the COVID-19 pandemic and an increase in the unemployment rate.
- THE INFLATION RATE
From the perspective on buyer value record, the first quarter of 2020 has encountered a decrease in the purchaser value file (CPI) for every single urban shopper by 0.4% on a regularly balanced figure. The rate of inflationfor the period of March was and incremented to 1.5% when contrasted with a swelling rate of – 0.2 for the long stretch of February.(“Consumer Price Index,” 2020)
Regarding the buyer value file, the energy products declined to 5.8% in March, which is the largest monthly decrease since 2015. The food index extended to 0.3percent, which was 0.4 percent in February. Other household items experienced a reduction of 0.1%.
The general household experienced a decrease of 1.6 percent for the months completing March, 2020. This is the lowest decrease in 12-month since 2014. The document for all things less sustenance moreover, essentialness rose 2.1 percent for the 12 months completing March. The sustenance list declined 0.4 percent over the cross, while the imperativeness document rose 0.1 percent.
Among the products with the most declined increment were fuel oil and gas, which rose to 5.8 percent and 7.0 percent individually. Then again, the two items with the most reduced change were vegetable and dairy-related items. The list for vegetables declined by a pure 0.2 percent, while that of dairy-related items declined by only 0.3 percent (“Consumer Price Index,” 2020.).
Beneficiaries and losers from inflation.
In particular, savers and banks that benefit from secure interest rates that have received outstanding shares do not act in good faith in the face of a loss of purchasing power, such as deposit holders and term interest rates paid. An absurd account would be in the midst of the 1923 hyperinflation in Germany. If you had lent a colleague enough money in mid-1923 to buy a car and paid for it in late 1923, you might be able to obtain an instance of the game with him. Therefore, it is certainly not difficult to see that the borrower has a car and can pay for it in cash (Cagan, Lipsey, and National Office of Economic Research, 1978). The master’s in credit was a huge disappointment.
In addition, borrowers, whether individuals, companies or government agencies, benefit from the fact that what appears to be the amount to be paid (in proportion to the amount obtained today) is less honest with the continued increase in spending. Holders of enhanced expansion activities, such as tolls or plans to change the prosperity of livelihoods that are above or even above bloating, are also winners. This also applies to money professionals in associations who, due to their importance in the market or the central sales method, can safely increase their expenses (Cagan, Lipsey and National Bureau of Economic Research, 1978)
- UNEMPLOYMENT DATA BY LABOR FORCE GROUPS AND DURATION.
Civilian unemployment.
| Male | female | |||||||
| BOTH SEXES
Age 16-19years |
20 and above | 20 and above | ||||||
| 2000 | 13.1 | 3.3 | 3.6 | |||||
| 2001 | 14.7 | 4.2 | 4.1 | |||||
| 2002 | 16.5 | 5.3 | 5.1 | |||||
| 2003 | 17.5 | 5.6 | 5.1 | |||||
| 2004 | 17.0 | 5.0 | 4.9 | |||||
| 2005 | 16.6 | 4.4 | 4.6 | |||||
| 2006 | 15.4 | 4.0 | 4.1 | |||||
| 2007 | 15.7 | 4.1 | 4.0 | |||||
| 2008 | 18.7 | 5.4 | 4.9 | |||||
| 2009 | 24.3 | 9.6 | 7.5 | |||||
| 2010 | 25.9 | 9.8 | 8.0 | |||||
| 2011 | 24.4 | 8.7 | 7.9 | |||||
| 2012 | 24.0 | 7.5 | 7.3 | |||||
| 2013 | 22.9 | 7.0 | 6.5 | |||||
| 2014 | 19.6 | 5.7 | 5.6 | |||||
| 2015 | 16.9 | 4.9 | 4.8 | |||||
| 2016 | 15.7 | 4.5 | 4.4 | |||||
| 2017 | 14.0 | 4.0 | 4.0 | |||||
| 2018 | 12.9 | 3.6 | 3.5 | |||||
| 2019 | 12.7 | 3.4 | 3.3 | |||||
| Civilian unemployment rate | ||||
| Year or month | By educational attainment | |||
| Less than a high school diploma | High school graduates, no college | Some college or associate degree | Bachelor’s degree and higher 4 | |
| 2000. | 6.3 | 3.4 | 2.7 | 1.7 |
| 2001. | 7.2 | 4.2 | 3.3 | 2.3 |
| 2002. | 8.4 | 5.3 | 4.5 | 2.9 |
| 2003. | 8.8 | 5.5 | 4.8 | 3.1 |
| 2004. | 8.5 | 5.0 | 4.2 | 2.7 |
| 2005. | 7.6 | 4.7 | 3.9 | 2.3 |
| 2006. | 6.8 | 4.3 | 3.6 | 2.0 |
| 2007. | 7.1 | 4.4 | 3.6 | 2.0 |
| 2008. | 9.0 | 5.7 | 4.6 | 2.6 |
| 2009. | 14.6 | 9.7 | 8.0 | 4.6 |
| 2010. | 14.9 | 10.3 | 8.4 | 4.7 |
| 2011. | 14.1 | 9.4 | 8.0 | 4.3 |
| 2012. | 12.4 | 8.3 | 7.1 | 4.0 |
| 2013. | 11.0 | 7.5 | 6.4 | 3.7 |
| 2014. | 9.0 | 6.0 | 5.4 | 3.2 |
| 2015. | 8.0 | 5.4 | 4.5 | 2.6 |
| 2016. | 7.4 | 5.2 | 4.1 | 2.5 |
| 2017. | 6.5 | 4.6 | 3.8 | 2.3 |
| 2018. | 5.6 | 4.1 | 3.3 | 2.1 |
| 2019. | 5.4 | 3.7 | 3.0 | 2.1 |
With regard to the transmission of unemployment over several years, there is no such link, except for the unmistakable reality of unemployment for men and women. Most of the time, more women are unemployed than men over the years, regardless of age. Another view is that, unlike 2000 and 2019, the long-term unemployment rate was in one way or another for men and women of all ages (“President’s Economic Report, “2019)
|
Unemployment by duration and reason, |
||||||||||
| [ | ||||||||||
| Year or month | Unemployment | Duration of unemployment | Reason for unemployment | |||||||
| Less than five weeks | 5–14 weeks | 15–26 weeks | 27 weeks and over | Job losers 3 | Job leavers | New entrants | ||||
| 2000. | 5,692 | 2,558 | 1,815 | 669 | 649 | 852 | 1,961 | 434 | ||
| 2001. | 6,801 | 2,853 | 2,196 | 951 | 801 | 1,067 | 2,031 | 459 | ||
| 2002. | 8,378 | 2,893 | 2,580 | 1,369 | 1,535 | 1,124 | 2,368 | 536 | ||
| 2003. | 8,774 | 2,785 | 2,612 | 1,442 | 1,936 | 1,121 | 2,477 | 641 | ||
| 2004. | 8,149 | 2,696 | 2,382 | 1,293 | 1,779 | 998 | 2,408 | 686 | ||
| 2005. | 7,591 | 2,667 | 2,304 | 1,130 | 1,490 | 933 | 2,386 | 666 | ||
| 2006. | 7,001 | 2,614 | 2,121 | 1,031 | 1,235 | 921 | 2,237 | 616 | ||
| 2007. | 7,078 | 2,542 | 2,232 | 1,061 | 1,243 | 976 | 2,142 | 627 | ||
| 2008. | 8,924 | 2,932 | 2,804 | 1,427 | 1,761 | 1,176 | 2,472 | 766 | ||
| 2009. | 14,265 | 3,165 | 3,828 | 2,775 | 4,496 | 1,630 | 3,187 | 1,035 | ||
| 2010. | 14,825 | 2,771 | 3,267 | 2,371 | 6,415 | 1,431 | 3,466 | 1,220 | ||
| 2011. | 13,747 | 2,677 | 2,993 | 2,061 | 6,016 | 1,230 | 3,401 | 1,284 | ||
| 2012. | 12,506 | 2,644 | 2,866 | 1,859 | 5,136 | 1,183 | 3,345 | 1,316 | ||
| 2013. | 11,460 | 2,584 | 2,759 | 1,807 | 4,310 | 1,136 | 3,207 | 1,247 | ||
| 2014. | 9,617 | 2,471 | 2,432 | 1,497 | 3,218 | 1,007 | 2,829 | 1,086 | ||
| 2015. | 8,296 | 2,399 | 2,302 | 1,267 | 2,328 | 974 | 2,535 | 879 | ||
| 2016. | 7,751 | 2,362 | 2,226 | 1,158 | 2,005 | 966 | 2,330 | 823 | ||
| 2017. | 6,982 | 2,270 | 2,008 | 1,017 | 1,687 | 956 | 2,079 | 690 | ||
| 2018. | 6,314 | 2,170 | 1,876 | 917 | 1,350 | 852 | 1,928 | 602 | ||
| 2019. | 6,001 | 2,086 | 1,789 | 860 | 1,266 | 823 | 1,810 | 591 | ||
As far as unemployment by span and reason, there is a general pattern that the unemployment rate for the time length less than five weeks was higher than in different terms. This was genuine additionally to work by reason, which appeared to higher for employment failures.
Increase the teenage population and unemployment
With the decline in the number of jobs held, the developing number of youngsters is probably going to expand the unemployment rate, which affects the economy. If new openings are made to join these locals, the joblessness rate will increase significantly (Güth&Paul, 2008).
The possibility that population growth can cure unemployment is false, as is the likelihood that job cuts for the wealthy will increase wages and reduce scarcity. The development and higher birth rates, which keep young people, make them more dependent on the energy age and a creative crowd (Nilsen and Reiso, 2011). In a world characterized by high production costs and the characteristic symptoms of reaching crossroads for improvement, the creation of people leads to high unemployment, essentially higher average costs and lower wages.
References.
Güth, W., & Paul, C. (2008). Downsizing the labor force by low and high-profit firms: An experimental analysis. Jena: Univ. [u.a.
Nilsen, &. A. &Reiso, K. H. (2011). Scarring effects of unemployment. München: CESifo
2019 Economic Report of the President | The White House. (2020). Retrieved from https://www.whitehouse.gov/administration/eop/cea/economic-report-of-the-President/2016
Cagan, P., Lipsey, R. E., & National Bureau of Economic Research. (1978). The economic effects of inflation. Cambridge, MA: Published for the National Bureau of Economic Research by Ballinger Pub. Co.
Consumer Price Index. (2020). Retrieved from http://www.bls.gov/news.release/cpi.toc.htm
Employment Situation. (2020). Retrieved from http://www.bls.gov/news.release/empsit.toc.htm