Recession is the significant factor that effects employment in the American economic system. Recession is a period of decline in total output income, employment and trade lasting 6 months to a year. For the year 2002 employment declined by 1.0 percent at the national level. The 1.0 percent decline left a half a million people unemployed. Unemployment plagues the economic system because of its recession trends, different causes affecting the job market, and its economic costs.
In April of 2002, the unemployment rate raised to 6.0 percent the highest level in eight years; this was due to recession characteristics. The recession characteristics include stock market drop, a slowdown in production technology, the failure of computer companies, and a major drop in air travel due to the tragedy of September 11. According to the Federal Reserve the unemployment rate of 2002 is mild to the recession of 1981-82.
During the recession of 1981-82 the U.S. employment rate fell by 2.9 percent and the nation's unemployment rate rose to 10.7 percent (highest level for a post war period. The recession was sever because the economy was already weak when the recession began, it had time to recover from the recession of the prior year. The recession of 2002 was mild, but with the economy still fragile there is still a risk that recovery could stall and cause the economy to lip back into recession. If the economy slips back into decline the unemployment rate will skyrocket and face further decline in the year 2003. The economy is counting to recover from recession, but a slow rate. The slow rate of recovery has caused many different types of unemployment to occur.
A recession change in specific industries and labor markets has caused different types of unemployment to take affect on the economy. These different types of employment are cyclical, structural, frictional, seasonal, hidden, and long term. Cyclical unemployment is caused by the economic down turns.
