The Free Press, Mankato, MN

State, national news

September 7, 2013

The job market Fed faces: healing but still ailing

WASHINGTON — Just how sturdy is the U.S. job market?

That's the key question the Federal Reserve will face when it decides later this month whether to reduce its economic stimulus.

The answer depends on where you look.

The economy has added jobs for 35 straight months. Unemployment has reached a 4½-year low of 7.3 percent. Layoffs are dwindling.

Yet other barometers of the job market point to chronic weakness:

The pace of hiring remains tepid. Job growth is concentrated in lower-paying industries. The economy is 1.9 million jobs shy of its pre-recession level — and that's not counting the additional jobs needed to meet population growth. Nearly 4.3 million people have been unemployed at least six months.

What's more, employers have little incentive to raise pay. Many unhappy employees have nowhere else to go.

Still, when it meets Sept. 17-18, the Fed is expected to reduce its $85 billion a month in bond purchases by perhaps $10 billion. Its purchases have helped keep home-loan and other borrowing rates low to try to encourage consumers and businesses to borrow and spend more.

Here's a look at the job market's vital signs as the Fed's decision nears:

Unemployment

The unemployment rate slid in August to 7.3 percent, its lowest level since December 2008. Unemployment had peaked in October 2009 at 10 percent and has since fallen more or less steadily. Since then, the number of people who say they have jobs has risen by 5.7 million. And the number of those who say they're unemployed has dropped by nearly 4.1 million.

That's the good news behind the tumbling unemployment rate.

But the rate has been falling, in part, for a bad reason: People are dropping out of the labor force. Once people without a job stop looking for one, the government no longer counts them as unemployed.

Text Only | Photo Reprints
State, national news
  • Charges expected in killing of policeman Prosecutors planning to file charges against suspect Brian George Fitch

    August 1, 2014

  • Midwest economic index slumped in July Mid-America Business Conditions Index dropped more than 3½ percentage points

    August 1, 2014

  • Minnesota gay marriage law reaches anniversary ST. PAUL, Minn. (AP) — It's been a year since Minnesota's gay and lesbian couples got the right to legally marry. The anniversary of the state allowing same-sex marriage arrived Friday. It was a quieter scene than last year when couples lined up to

    August 1, 2014

  • 35 killed, soldier missing as Gaza truce unravels GAZA CITY, Gaza Strip (AP) — A Gaza cease-fire quickly unraveled Friday as violence erupted in and around the southern town of Rafah, with 35 Palestinians killed by Israeli shelling and the military saying one of its soldiers may have been abducted.

    August 1, 2014

  • Minimum wage increases to $8 an hour in Minnesota ST. PAUL, Minn. (AP) — Minimum-wage earners in Minnesota get a pay raise to $8 an hour. For Minnesota's lowest-paid workers, the most welcome move the Legislature made this year was increasing the minimum wage for the first time in nearly a decade.

    August 1, 2014

  • Congress racing to finish Congress races to finish veterans, highway bills

    July 31, 2014

  • Target New CEO [Duplicate] Target names Pepsi's Cornell as chairman, CEO MINNEAPOLIS (AP) — Target has hired Pepsi executive Brian Cornell as its new chairman and CEO as it looks to recover from a huge data breach and troubles in Canada. Cornell replaces interim CEO John Mulligan, who is chief financial officer for the M

    July 31, 2014 1 Photo

  • Brain wave monitoring is better gauge than using a focus group, study says To predict a large population’s likely response to something — a product, politician or policy — political consultants, marketing gurus and advertising execs have long favored the focus group. Ask a small segment of the target audience what it thinks

    July 31, 2014

  • Argentina slides into default as debt talks fail NEW YORK (AP) — The collapse of talks with U.S. creditors sent Argentina into its second debt default in 13 years and raised questions about what comes next for financial markets and the South American nation's staggering economy. A midnight Wednesd

    July 31, 2014

  • Exchange Bee Researcher [Duplicate] Bee researcher takes aim at central Minnesota park WAITE PARK — Crystal Boyd strained four bees, three flies and one leafhopper from a yellow pan trap, the third of 12 in a transect topping a granite outcrop in Quarry Park Scientific and Natural Area.She popped everything into a labeled, zip-top plas

    July 31, 2014 4 Photos