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Unemployment in U.S. Peaked in October


History indicates U.S. joblessness in coming months won’t exceed the quarter-century high reached in October, said Lakshman Achuthan, managing director at Economic Cycle Research Institute in New York.

Unemployment unexpectedly held at 9.7 percent in February, figures from the Labor Department showed last week. The rate climbed to 10.1 percent in October, the highest level since 1983.

“You have never had a four-tenths-of-a-point decline in the rate and then see it go up to a new peak” since the end of World War II, Achuthan said today in an interview on Bloomberg Radio. “The unemployment rate already peaked.”

The reason the improvement does not “ring true” is that long-term unemployment remains high, Achuthan said. The skills of many unemployed Americans do not match the current demands of the workplace, he said.

“The long-term unemployed, people who have been unemployed for more than six months, that’s 40 percent of the people out of work,” said Achuthan.

Other workers have been more fortunate, as suggested by the decline in the unemployment rate and the slower pace of job cuts from a year earlier, he said.

“The part you don’t see is that 60 percent of the unemployed, people who are shorter-duration unemployment, people who lost their job then in another month or two get another job, they’re seeing the jobless rate fall faster than the other two recoveries,” Achuthan said.

Skill Sets

The reason they are able to find work is “beyond just education,” he said. “Their skill sets fit what people want right now and the ones that are long-term unemployed are mismatched. They could be people who were associated with the bubbles, housing and credit, or they could be in manufacturing.”

On March 5, the Labor Department also reported employment declined less than forecast as payrolls dropped by 36,000 workers. Employment fell in construction as blizzards crippled parts of the Atlantic seaboard. Temporary employment increased, as did manufacturing, according to the government statistics.

Still, the underemployment rate, which includes part-time workers who’d prefer a full-time job, rose last month to 16.8 percent from 16.5 percent in January, the Labor Department reported.
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