Unemployed Not Optimistic

I read this over at 24/7 Wall Street last week. I didn't have time to post it since I was going away. I'll add my thoughts on current unemployment afterwards. {Highlights mine}

Sixty-One Percent Of Unemployed Not Hopeful About Finding Work

By Douglas A. McIntyre

In another blow to the notion that unemployment will improve, those with their feet on the streets looking for jobs are remarkably pessimistic about their prospects. A new Gallup poll shows that 61% of those surveyed are “not hopeful” about finding a job in the next four weeks. The survey was done by interviews with 4,000 unemployed Americans who are over 18 years old. The project was completed last month.

The research found that the “least hopeful” group of adults in the survey was those between the ages of 50 to 65 years old, 71% of whom were pessimistic. Those with college and post-graduate degrees were also high on the “least hopeful” list at 65%. The survey also covered issues that included the financial outlook of people out of work, their ability to pay bills, their feeling of “wellness”, and attitudes by geographic region.

The news dovetails with the latest data from The Conference Board which showed consumer confidence at a 46 point level in February down from 56.5 in January. The number for this month was the lowest since April 2009–the depth of the recession and stock market sell-off. When those surveyed look at their “present situation” confidence dropped to 19.4, which is the lowest level in 27 years and reaches back to the 1983 recession when unemployment rose to 10%.

The Gallup data also underscores the extreme difficulty in finding jobs because of low levels of hiring. Labor Department numbers from early this month showed that there were 6.1 jobs seekers for every open job. The number is high when put against numbers from years past.

The Gallup data indicates that people are not encouraged that government jobs programs or stimulus packages are reviving the job market. The Congressional Budget Offices forecast in its semi-annual report on the economy that joblessness would stay above 10% though mid-year. It appears that most people who are out of work take a similar view.

My thoughts: I think we're in an era of chronic unemployment that will take years to unwind. I think the gains in productivity and the results of outsourcing throughout the economy are such that those on the lower rungs of the education ladder are increasingly finding that their options limited. Conversely, my guess is that those with the highest levels of education or work experience have seen the worst pass, are increasingly feeling more confident of their jobs and have begun to spend money again.

The next shoe to drop in my opinion is the coming unemployment cycle that is going to hit governments at all levels-forcing givebacks and concessions from their employees. I'll have more to say on this subject at some other time. Suffice it to say though that governments are some of the largest employers of minority groups and people with the lowest levels of education and I think the fallout from what is to come here is only beginning to be felt.

Link: Unemployed Not Optimistic