Average unemployment time falls throughout the country

03.18.2013


Duration of average unemployment time falls throughout the country
Duration of average unemployment time falls throughout the country

Millions of people are finding jobs more quickly than job seekers in 2010. According to recently released data from the Department of Labor, the median duration of unemployment dropped from 25 weeks in June 2010 to just 16 weeks in January 2013. This suggests that as more employers take on workers, fewer job seekers are competing for individual openings. This provides further evidence that the labor market in America is indeed improving. 

According to Bloomberg, the improving conditions also corroborate Federal Reserve Chairman Ben Bernanke's belief that the hiring market is in fact still very flexible, and the long duration of joblessness seen in the last two years is not a permanent change in the labor market. 

Dale Mortensen, an economics professor at Northwestern University, said the figures show the current monetary stimulus may be helping the labor market  – and the economy as a whole – improve more quickly. 

"There is little threat that aggressive monetary policy will be inflationary," Mortensen said. "The market will return to normal as household consumption does. That will still take more time but seems to be happening."

Demand for contract staffing
Jeffrey Silber, senior analyst for BMO Capital Markets, stated that as the labor market tightens up, the demand for the services of temporary staffing companies will surge. 

"As it becomes more difficult to find qualified labor, you need to use outside experts – whether temporary staffing providers or full-time recruiters – to help fill these positions," he said.

As the slack gives way and there are fewer jobless in the country, the new market conditions "should help pricing power of staffing firms prospectively," according to JPMorgan Chase business services analyst Andrew Steinerman.

Further evidence of an improving labor market was released on Friday, March 8, when the Bureau of Labor Statistics reported that total nonfarm payroll employment climbed by 236,000 in February, while the unemployment rate declined to 7.7 percent. Moreover, Regis Barnichon, a researcher at Universitat Pompeu Fabra in Barcelona, predicts the unemployment rate will continue to drop throughout the year, hitting 7.4 percent by September.