One of the biggest issues facing this country over the last several years of financial hardship and economic decline, is a rising unemployment rate. Ever since 2009, the country has struggled to get it’s unemployment level below pre-recession levels. However, recent data indicates that unemployment is improving for the nations discouraged workers, those who have been unemployed for greater than 6 months.
What Change In The Labor Force To Open Up More Jobs For Discouraged Workers?
One of the primary catalysts in improving the labor market is the rebound in the housing market. When the housing bubble burst, millions of construction workers were displaced because no one was building homes. According to Mark Vitner from Wells Fargo, Construction payrolls are up by 300,000 in the last year. Another reason that discouraged workers are finding jobs quicker than in previous years, is that the stigma of being unemployed has lifted. Enough people have been through hardship over the last several years, to realize that being jobless for more than 6 months is not entirely a negative sign of skill, work ethic, or desirability. Rob Valleta, who conducted a study from the San Francisco Federal Reserve commented that: “Many of them (discouraged workers), are people who have good skills but have been hurt by a persistently week job market.”
Unemployment Rates Are Improving Because Many Have Stopped Looking For Jobs
Another factor that impacts unemployment rates is that many discouraged workers have given up on trying to find a job and will probably wait until the job market improves to begin their search again. Along with this, unemployment benefits for many workers have ended, which push them off the unemployment radar dropping the rate down even further. Others were forced into an early retirement because of job loss and also do not factor into unemployment.
Nonetheless, there are many signs that are showing that the job market is well on its way towards being healthy once again. As an investor this is a sign that maybe things are heading towards improvement economically and it may be time to reconsider a position in the stock market once again. If you haven’t yet jumped on the recovery wagon, perhaps now is the time. For more information speak to a Redhawk Financial Advisor near you.