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Economist says slight unemployment increase in August could be a good sign

Career Source Tampa Bay
Posted at 4:21 PM, Sep 02, 2022
and last updated 2022-09-04 12:31:14-04

TAMPA, Fla. (WFTS) — The United States continues to add jobs but is seeing a slowdown.

The Bureau of Labor Statistics released its August jobs report Friday.

The U.S. added an additional 315,000 jobs in August. That number is down from the 526,000 added in July.

Meanwhile, unemployment rose 0.2% from July to August, landing at 3.7%. More than 340,000 people became unemployed in the country, bringing the overall number up to 6 million Americans. July's employment rate had returned the county to pre-pandemic numbers.

"It was a little bad because we did take a step back. We've seen much worse, much worse job markets in the past," said University of Tampa Economics Professor Thomas Stockwell.

However, Stockwell said this latest jobs report isn't all bad. Any job added to the market is a good thing. Stockwell also believes this could be the key to lowering inflation.

Career Source

"Inflation still remains very, very high, and the Federal Reserve is taking actions to try to bring inflation down. Those actions that the Federal Reserve is doing will cause the unemployment rate to go up. The Federal Reserve still has more work to do. The unemployment rate should still tick up. It didn't go up by that much this month, which means we still aren't seeing those very bad signs quite yet," he said.

Stockwell said this is a process that will take time since the Federal Reserve is hoping to slow hiring and wage growth, two things that fuel inflation.

"The Federal Reserve is raising interest rates which is going to cause the unemployment rate to go up. They're doing that to bring inflation down," he added. "So the sweet spot in my mind is, bring inflation down and try to keep the lowest possible unemployment rate that you can right, which means the keep as many people employed as you possibly can while bringing inflation down."

However, that still leaves millions of people struggling to find a job, like Joaquin Martinez.

"The job market has been kind of failing. It's really hard to find a job without someone else trying to help you out," Martinez said.

Martinez said he's been on the job hunt since 2019.

"It's a little frustrating to be honest. Like, you're here, you're ready. And you're applying to all these places that are saying they're hiring and then not even getting told that you were hired, just being ghosted out right."

Martinez said the waiting game is frustrating because it keeps him from finding other opportunities.

"It's frustrating because then when you're waiting, you're not looking for the next opportunity. You're waiting for the response. And then there's no response, you decide for yourself saying, yeah, they're not gonna get back to you. And we just go on to the next one," he added.

After years of no luck, Martinez went to Career Source for help. He said within a month, he was able to land a paid internship.

The jobs report trend shows positive growth for college grads. The seasonally adjusted unemployment rate for college graduates 25 and older is 1.9%.

Stockwell said that's because many companies are shying away from hiring based on age and experience.

"Firms, at some point, have to sit down and say, 'Okay, this opening is not getting filled. We need to take somebody.' I think that's what you're seeing right now is, these firms are not necessarily lowering their standards, because these people are definitely qualified to do the jobs. But there are more openings than there are people available. You have to take what you can take; the workers that are available and want your job."