Accounting

Cyclical Frictional and Structural Unemployment

Fifty percent, 10 percent, 30 percent and 10 percent of the total U.S unemployment accounts for unemployed persons due to layoff, those who have already quit their previous jobs, those reentering the labor force and new entrants to the labor force respectively. According to the Bureau of labor statistics, the number of unemployed persons in the U.S stood at 11.7 million while the unemployment rate stood at 7.6 percent in March 2013. This was a decrease from 7.7 percent in the previous month. In March 2013, the unemployment rate for adult males was 6.9 percent, adult females 7.0 percent and youths 24.2 percent. Categorized according to race, the unemployment rate for whites was 6.7 percent, blacks 13.3 percent, Hispanics 9.2 percent and Asians 5.0 percent. In the same month, the number of persons unemployed for 27 or more weeks, stood at 4.6 million accounting for 39.6 percent of the unemployed. The labor force participation rate reduced by 0.2 percent while the civilian labor force reduced by 496,000. The involuntary part-time workers dropped by 350,000 to 7.6 million in March. They are regarded as involuntary part-time workers because their hours had been cut back or because they were unable to find a full-time job. In the same month, employment in the retail sector declined by 24,000 while employment in the health sector, professional and business services increased by 23,000 and 51,000 jobs respectively. The construction industry added 169,000 jobs. Job decline in clothing and accessories stores stood at 15,000, building material and garden supply stores at 10,000 and electronics and appliance stores 6,000. Some sectors in the government such as Postal Service employment fell by 12,000. Compared to previous months, major industries such as mining, manufacturing, wholesale trade, transportation and warehousing, information, financial activities, state government, and local government recorded dismal changes in employment. Since 1948, to 2013, the average unemployment rate has been 5.81 percent. The highest unemployment rate was in 1982 hitting a high of 10.8 and the lowest ever was in 1953 hitting a low of 2.50 percent. Unemployment is defined as the fraction of the total people looking for a job to the total labor force. Since the great depression, the U.S has recorded the highest stretch of theunemployment rate of above 8 percent. The congressional budget office projects that the unemployment rate will remain above 8 percent until 2014.

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