There was a small glimmer of hope on the perpetually dismal jobs front last Thursday. Initial jobless claims came in well below expectations at 391,000, compared to 428,000 the week before, and fell to levels not seen since April.
But there was a caveat. The Labor Department cited "technical issues and seasonal adjustment volatility, rather than economic factors" as the reason for the drop.
"While the market responded well to the Initial Claims print, the Labor Dept caveat shouldn't be ignored," said Peter Boockvar, equity strategist at Miller Tabak, last week. "Unfortunately though we'll have to wait until next Thursday to see whether a new positive trend is being established or today was a technical anomaly."
Perhaps the bigger number to watch this week is the September jobs number on Friday after the August report when no net jobs were created during the month.
Currently the official unemployment rate in the United States is 9.1%. But when you factor in the underemployed — those who have dropped out of the jobs search or who are working part-time but really desire full-time work — that 9.1% figures actually ranges anywhere from 15% to more than 20% depending who you ask.
Mort Zuckerman, U.S. News and World Report chairman and editor-in-chief, figures the real unemployment rate to be around 19% and fears that in the months to come job creation could fall into negative territory. He says it is the lack of demand and lack confidence in the U.S. government and consumer that is preventing employers from hiring.
"Employers are basically focusing on their bottom line rather than on their top line and that means they are going to cut costs, because their top line isn't growing any more," Zuckerman tells The Daily Ticker's Aaron Task. Adding fuel to this fire is the fact that "there are many jobs for which we have a mismatch of skills and job needs" particularly in the areas of science, technology, engineering and math (STEM).
When companies cannot find the skilled labor they need here at home, most often those jobs are sent abroad where there are qualified candidates who are frequently willing to work for less.
To help address this long-term issue, U.S. News and World Report is making a push to focus on STEM education in the high schools where the root of the problem begins. Known for its Best Colleges lists, the publication is launching the first-ever ranking of the Best High Schools for Math and Science in the hopes that the best schools will become models for others around the country.
The top five high schools for STEM education this year are:
1. High Technology High School (NJ)
2. BASIS Tucson (AZ)
3. Thomas Jefferson High School for Science and Technology (VA)
4. Oxford Academy (CA)
5. The School of Science and Engineering Magnet — SEM (TX)
But the problem runs deeper than just educating the students. "The most important influence on the quality of the students that come out of this is the teacher and we don't have the teachers that are qualified," says Zuckerman pointing to the fact that 30% of math teachers have little to no background in mathematics and the same goes for 60% of science and engineering teachers.
In order to really fix the structural jobs problem facing the country, Zuckerman believes the government needs to get involved by doing more to support STEM at every education level and by doing more to support worker retraining programs.
"This is not a short-term solution, but if we don't start the long-term solutions now, we are going to be in trouble forever," he says.