Local Economist: Still Long Way To Go Before Recovery
Macomb, IL – The federal government released its most recent unemployment numbers last week, and some analysts were encouraged. The unemployment rate fell to a flat 10 percent nationwide, and roughly 11,000 jobs were lost (seasonally adjusted.)
But at least one analyst warns that there's still a long way to go before a full recovery.
Dr. William Polley is an associate professor of economics at Western Illinois University. He says the November's job loss report is the most encouraging since the recession began, but there are several factors that must be considered.
First, he says one must consider the time of year it is. Many retailers stock up on seasonal employees during the holidays to combat the rushes.
That means a former mid-level manager at a big company might now be working at Wal-Mart or Best Buy to get by.
"A job is a job," says Polley. "Whether someone is working at retail seasonally, just sort of to make ends meet, when they would like to be employed in some kind of professional occupational employment. Government statistics are going to see them as employed no matter what."
Polley says economists call the unemployment rate we see in the headlines as "U-3," or the third type of unemployment. There are also rates that take other factors into account, such as former full time employees who are now part time, those who are underemployed, and those who are not looking for a job at the moment, but have looked in the past year, and would be willing to go back to work should the opportunity arise. That's called "U-6," which is the broadest measurement. There are six total levels.
Polley says the U-6 unemployment rate is hovering around 17 percent. In better economic circumstances, he says the difference between U-3 and U-6 should be about 3.5 percent -- not the seven percent present now.
Polley says the unemployment rates will likely rise temporarily as more people look for jobs when the economy starts to rebound.
"As they start to see the economy is recovering, and the job prospects are getting better, they get back into the labor market," he says. "Well, they don't find jobs right away. So as they come back, they are keeping that unemployment level at a somewhat higher, somewhat more elevated level."
Polley says the national unemployment figures don't have much bearing on local numbers, such as those in the Tri-State region. For example, he says McDonough County's unemployment rate usually mirrors the national average. Because of Western's presence, McDonough fares better than some neighboring counties such as Fulton (13.3%) and Hancock (11.3%).
Polley expects the economy to start recovering in earnest in a few months.