The U.S. unemployment rate has finally dropped below 7.0%, yet there are occupations where the rate of unemployment is well below the natural rate. An unemployment rate of 4.5% to 5.5% is often referred to as the natural rate. (Milton Friedman and Edmund Phelps developed the concept of the natural rate in the 1960s to describe the rate of unemployment where the economy operates most efficiently.)
The occupations with the lowest unemployment rates are Healthcare practitioners, Computer, Legal, Education, and Math. Many of the 10 occupations require a college degree. On the other hand many of the occupations that have levels of unemployment above 5.0% have minimal education requirements or they require only on-the-job training. For example, a laid off construction worker may not have skills that are transferable to being a software developer. As a result some occupations, such as construction workers, may consistently have higher unemployment rates.
On a positive note, the unemployment rate has declined in 7 of the 10 categories. Interestingly enough, the number of unemployed workers in these 10 categories has increased from about 2.0 million to 3.0 million over the past year. Most likely that is a result of increased hiring, volatility in companies, and job churn.
©Copyright 2011 by CBER.