New Numbers on Unemployment Not Quite as Bad As Expected
New unemployment numbers for July are out today, and they show a slight drop in the jobless rate, to 9.4 percent — the first decline since April of 2008, Bloomberg reports. The pace of job losses also slowed, with payrolls falling by 247,000, compared to a 443,000 loss in June, Labor Department figures show. The unemployment rate was 9.5 percent in June.
Taken as a whole, these numbers are not exactly good — anytime unemployment hovers anywhere near 10 percent, it’s cause for worry — but they are better than expected. And beating expectations can go a long way, both on Wall Street and in Washington. But it doesn’t mean much to people still out of work. It remains very tough out there. The New York Times explains that unemployed workers face more than just a tight market in their quest for work. Employers increasingly are dismissing candidates based on credit checks, giving those with unpaid bills and mounting debts even more to worry about, The Times reports.
Once reserved for government jobs or payroll positions that could involve significant sums of money, credit checks are now fast, cheap and used for all manner of work. Employers, often winnowing a big pool of job applicants in days of nearly 10 percent unemployment, view the credit check as a valuable tool for assessing someone’s judgment.
But job counselors worry that the practice of shunning those with poor credit may be unfair and trap the unemployed — who may be battling foreclosure, living off credit cards and confronting personal bankruptcy — in a financial death spiral: the worse their debts, the harder it is to get a job to pay them off.
“How do you get out from under it?” asked Matthew W. Finkin, a law professor at the University of Illinois, who fears that the unemployed and debt-ridden could form a luckless class. “You can’t re-establish your credit if you can’t get a job, and you can’t get a job if you’ve got bad credit.”
Lawmakers in some states are considering curbs on the practice of using credit checks, according to The Times.
The increasing use of credit checks is one sign that the job market may remain a hard place to navigate, long after the jobless rate improves. The economy isn’t going to climb out of its hole overnight. One of the expectations here that probably won’t get much attention is that difficult times are still ahead for many who hope to find work, despite some improvement in the unemployment rate.