City Business Solutions Respond to Claims the US’s Unemployment Rate is in a Bad State

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According to an article at the New York Times, the U.S. unemployment rate of 6.2 per cent reported in July may not be accurate. City Business Solutions fear that the actual statistics may be higher than reported and explain how supporting entrepreneurship could reduce the current unemployment rate.

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The success of small businesses is crucial for the U.S. economy, so the more we foster entrepreneurship, the more likely are we as entrepreneurs to help decrease unemployment and speed up economic growth.

In July this year, the U.S. unemployment rate was reported to be 6.2 per cent. An academic paper highlighted in the New York Times finds however that the long-known source of potential error in the unemployment rate 'has worsened considerably over time.' City Business Solutions believe that as a result, the actual unemployment rate in the U.S. may be significantly higher than reported earlier this year. The firm therefore calls for increasing support for entrepreneurs in order to reduce unemployment and accelerate economic growth.

About City Business Solutions: http://citybusinesssolutionsusa.com/about-us/

At the moment, the U.S. unemployment rate is calculated by averaging the results from eight separate rotation groups of the U.S. population. Rotation groups are created monthly by drawing a random sample of people from the U.S. population for the Current Population Survey (CPS). A rotation group is included in the CPS for four months, then disregarded for the remaining eight months, and finally brought back for another four months before being dropped for good.

Ideally, the people in all eight rotation groups should have the same likelihood of being unemployed. “This seems easy to accomplish in theory. In reality however, people’s circumstances are different in each rotation group”, says Jamie Shahin of City Business Solutions. “This is very difficult to measure; however the results clearly reveal the existing challenges.” In fact, in the first half of 2014, the newest rotation group had an unemployment rate of 7.5 per cent, while the unemployment rate of the oldest rotation group was calculated at 6.1 per cent, a disparity of 1.4 per cent. Mrs Shahin, CEO at City Business Solutions comment: “This is a huge discrepancy. The U.S. unemployment rate is closely looked at down to the tenth of a percentage point, so the question may arise of how exact our actual unemployment rate may be?”

City Business Solutions are concerned about the findings. The firm believes that the way the unemployment rate is calculated should urgently be relooked at. “Determining the actual unemployment rate is important, so we can better understand the impact on the U.S. economy and identify measures to encourage economic growth.” Adds Jamie Shahin.

The firm believes that the unemployment rate could be reduced if more businesses would be willing to support and mentor entrepreneurship. Managing Director of City Business Solutions, Jamie Shahin explains: “The success of small businesses is crucial for the U.S. economy, so the more we foster entrepreneurship, the more likely are we as entrepreneurs to help decrease unemployment and speed up economic growth.” City Business Solutions are a direct sales and marketing company based in Chicago, IL. The firm offers a Business Development Program to entrepreneurial-minded individuals who have the ambition to run their own business but may need support and guidance in order to get started. City Business Solutions’ Business Development Program equips participants with the relevant skills to run a successful business and create future employment.

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Jamie Shahin
@ChiCBSolutions
since: 05/2014
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City Business Solutions
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