Question:
Explain your local unemployment rate currently. Compare that rate to the state and national rates. Analyze the trends in the unemployment rate in the last 5 years. Explain why this rate is so important for our economy to focus on.
Week 3 Discussion: Local Unemployment Rate
The rate which depicts the percentage of people who do not have any job in the current situation, that is, people who are unemployed or are actively looking for jobs, of the labor force present in an economy, is regarded as the unemployment rate of that economy or that particular region (Mankiw, 2020).
Explanation of the local unemployment rate currently:
I reside in the village named Bourbonnais in Kankakee County in the state of Illinois, United States. The unemployment rate in Bourbonnais is 7.5% (Best places, 2022). The local unemployment rate in Kankakee County as of February 2022 is 6.5% (U.S. BUREAU OF LABOR STATISTICS, 2022).
Comparison of the local unemployment rate with the State and National rates:
The unemployment rate in Illinois as of February 2022 is 4.8%. On the other hand, the unemployment rate in the United States as of March 2022 is 3.6%, and in February 2022 was 3.8% (U.S. BUREAU OF LABOR STATISTICS, 2022). Hence it is observed that the unemployment rate tends to decrease as the area covered increases. In other words, the current unemployment rate is the most at the local level, that is, in Bourbonnais followed by the unemployment rates in Kankakee County and Illinois, and is the least at the national level, that is, in the United States.
Analysis of the trend of the unemployment rates in the last 5 years:
The unemployment rates in Kankakee County in the last five years, that is, from 2017 to 2021 are 5.5%, 5.4%, 4.8%, 8.8%, and 6.3% respectively (U.S. BUREAU OF LABOR STATISTICS, 2022). Hence, it was the highest during the Pandemic situation in 2020 (8.8%) and was the lowest in the pre-pandemic situation in 2019 (4.8%) when only the unemployment rates of the last 5 years are analyzed. Again, the unemployment rates in the state of Illinois in the last five years, that is, from 2017 to 2021 are 5%, 4.4%, 3.9%, 9.2%, and 6.1% respectively (U.S. BUREAU OF LABOR STATISTICS, 2022). Hence, it was the highest during the Pandemic situation in 2020 (9.2%) and was the lowest in the pre-pandemic situation in 2019 (3.9%) when only the unemployment rates of the last 5 years are analyzed. Lastly, the unemployment rates in the United States in the last five years, that is, from 2017 to 2021 are 4.4%, 3.9%, 3.7%, 8.1%, and 5.4% respectively (U.S. BUREAU OF LABOR STATISTICS, 2022). Hence, it was the highest during the Pandemic situation in 2020 (8.1%) and was the lowest in the pre-pandemic situation in 2019 (3.7%) when only the unemployment rates of the last 5 years are analyzed.
Importance of unemployment rate:
The rate of unemployment is a valuable indicator of the inefficiencies in the supply of labor. It indicates the incapacity of the economy to create jobs for individuals who are willing to work but are unable to do so, even though they are accessible and actively looking for work. The rate of unemployment is one of the most essential economic indicators, even though no one statistic can convey all of the complexities in the condition of the labor market. According to labor Economist Stephen Woodbury, the unemployment rate is of great importance in an economy as the hardships faced by the people residing in the country, the United States, for example, are indicated by this rate (Iacurci, 2020).
References:
BestPlaces. (2022). The economy in Bourbonnais, Illinois. BestPlaces. Retrieved April 6, 2022, from https://www.bestplaces.net/economy/city/illinois/bourbonnais
Iacurci, G. (2020, July 2). Here’s why the unemployment rate is so important. CNBC. Retrieved April 6, 2022, from https://www.cnbc.com/2020/06/05/heres-what-unemployment-rate-actually-means-and-why-its-important.html
Mankiw, N. G. (2020). Principles of macroeconomics. Cengage learning.
U.S. BUREAU OF LABOR STATISTICS. (2022). Databases, Tables & Calculators by Subject. U.S. BUREAU OF LABOR STATISTICS. Retrieved April 6, 2022, from https://data.bls.gov/pdq/SurveyOutputServlet
