Is the Unemployment Rate Going to Go above the Level That Should Be Set?

Unemployment Rate

According to a research report by the Center for Monitoring and Economic Research (CMIE) at the Massachusetts Institute of Technology, “Unemployment rate could reach 10% in May.” This comes as no surprise. With an economy that continues to weaken, there are fears that the unemployment rate will continue to rise. With every little bump in the economy, more people become unemployed.

Is the Unemployment Rate Going to Go above the Level That Should Be Set?

CMIE Research Report – Unemployment Rate

The worry about the unemployment rate is nothing new. The CMIE said in its research report, “In recent years, the level of joblessness has been rising in many parts of the world, especially in developed countries. Concerns about the sustainability of the present economic policies have been reawakened, forcing governments to take actions to address the problem of long-term unemployment.” The recession, it seems, is not going away any time soon.

The joblessness rate has reached its highest levels ever recorded since the global economy took a hit. The employment situation in the United States has worsened as companies have laid off several employees and have also attempted to fill the vacant positions with cheaper labor. The result? More people have given up on finding gainful employment. Worse, the unemployment rate may continue to rise, pushing more people back into the arms of unemployment.

Federal Reserve

The Federal Reserve is trying to control inflation, which is driving up the cost of everything. Inflation is a worrisome factor, especially in an economy that is already facing trouble. To combat inflation, the Federal Reserve is pumping trillions of dollars into the economy each month. However, this is only keeping things from getting out of hand. Even with this extra money injected into the economy, inflation is still rising.

One key area of concern is the unemployment rate could reach numbers that are far above those which have been seen in the past. Historically, unemployment rates rarely have been far above 4%. Should this happen though, it would be a serious problem for the American economy and would send it spiraling downward. One thing to keep in mind is the fact that most of the job cuts have come from the manufacturing industry. Therefore, businesses were forced to make some difficult decisions and lay off a large number of employees.

Recession – Unemployment Rate

Should the unemployment rate reach that level, it would be considered a recession, and all the people affected would lose their job. Many people become discouraged when they think about the possibility that they might lose their job during a recession. It’s important to remember though that a recession does not necessarily mean that you will lose your job. You need to have a positive frame of mind. There are several reasons why the unemployment rate could reach the level that it is currently at.

One factor may be that consumer spending is slowing down. If consumers are spending less as compared to the income they are generating then there may be a significant problem. Another reason why the economy may slow down is because of the European debt crisis. Europe is experiencing a major problem with the kind of debt that it has incurred and its ability to pay back its loans.

Positive Attitude

Regardless, of the reason why the unemployment rate may be higher now than it was in the past, the best thing to do is to take a positive attitude. One thing that is helping Americans to feel better is the stock market. Stock prices are at all-time highs and are expected to continue to go up. This is a good thing for the economy, but we need to remember that if the unemployment rate could reach a certain point, it could affect the stock market negatively.

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