Unfortunately, one should be prepared for unemployment to get worse.
Leading up to the government’s July report, economists are projecting an increase in the current unemployment rate of 9.5%. Here are some reasons why:
- 200,000 census workers will be laid off over the next few months.
- Jobs are not growing fast enough to absorb the 14.6 Million people who are looking for jobs.
- Businesses will be making adjustments for all the regulatory changes and costs from the health care reform law and financial reform law. Small business owners on the cusp of the health care insurance requirement limit of 50 employees are planning the next round of layoff in order to either stay under the limit or to offset the additional costs.
- Although factory reports show an increase in sales for manufacturing, this is deceptive because inventory has been at all time low. Distributors and retailers had little inventory on hand and now need to fill their shelves again. Unfortunately if retail demand does not pick up, no one knows how long restocking will continue.
- China’s economy is slowing and being restrained by the government which will slow the global economic recovery.
Of course unemployment is hitting some parts of the country harder than others. California, Arizona, Florida, Nevada, and Michigan account for all except 3 of the 25 cities with the highest unemployment rates. California has 9 of the top 10 cities. El Centro, CA ranked at the top with 27.6%.
According to employers and unions representatives, unemployment in some industry segments such as the the construction industry in California runs as high as 45%.
If you’re currently unemployed, take into consideration where you live, your industry, and the competition for the jobs in your field. Factor in the possibility that unemployment may last 1-3 years. Make financial decisions to protect your family in the long run.
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