Lag in Employment

Report Outline
Course of Employment and Unemployment
Causes and Results of Employment Lag
Proposals to Expand Job Opportunities
Special Focus

Course of Employment and Unemployment

Persistence of Unemployment After Recession

A strong year-end business surge, accompanied by confident forecasts of continuing economic expansion in the new year, put the vanishing 1957–58 recession definitely into the category of past events. To all appearances, last year's downturn has given way to a new period of growth and prosperity. However, cause for doubt and concern persists in one quarter. The unemployment picture brightened perceptibly in November, latest month for which statistics are available, but the proportion of the labor force without work is still well above what has to be expected in a free-enterprise economy. Why job opportunities have failed to keep pace with the rise in business activity, and how a closer approach to full employment can be promoted, are questions certain to engage the attention of government officials, Congress, and the public in coming months.

Changes In Totals of Employed and Unemployed

Total unemployment dropped last October to 3.8 million from a postwar peak in June 1958 of 5.4 million. The October total was the lowest since December 1957, but 1.3 million more workers were without jobs in October 1958 than in October 1957. Although the number of unemployed remained virtually stationary in November 1958, the volume of unemployment expressed as a percentage of the labor force, seasonally adjusted, dropped to 5.9 per cent. The latter figure, while the lowest since January 1958, was considerably higher than the figure of 4.3 per cent recorded at the start of the recession in August 1957.

The fact that the total number of jobless workers did not increase appreciably in November came as a surprise to economists and was cited as evidence that business recovery had moved into second gear. Advent of cold weather always brings layoffs on farms and in construction and amusement industries. According to the Census Bureau, unemployment usually increases by 50 per cent from October to January, apart from any changes caused by swings In the business cycle. The general rise in business activity was held chiefly responsible for the improved unemployment situation in November and the two preceding months of 1958. Job increases were widespread in the durable goods industries, where the proportion of workers unemployed fell from 12 to 7.5 per cent between August and November. In the automobile industry the proportion of workers without jobs, which was above 30 per cent last spring, was almost down to 12 per cent in the month of November.