Brad DeLong says efforts to have the economy create jobs on its own haven't worked. Looking to the mid-term elections, lawmakers have a few options left to improve the employment picture.
There is still time for a substantial shift in federal spending toward high-employment (but in all likelihood low-value) projects to reduce unemployment before the end of 2010 – if Congress acts quickly. And there is still time for a substantial temporary and incremental new-hire tax credit aimed at getting businesses to boost employment before the end of 2010.
Jan 27, 2010 10:27 AM
Kathryn Thompson at West End-based TRG writes that the jobs stimulus bill being hammered out now is almost guaranteed to include a big chunk of cash for infrastructure spending that will allow states to better plan and staff for longer-term projects.
What is different now is the political will to do something about unemployment...even if it comes as a self-serving re-election strategy. [...] Fortunately for the construction industry, the Democratic party believes in only one formula for stimulating the economy, government spending programs. We expect to see more of it, and soon, in one form or the other. Ultimately, that will play out well for our building materials, E&C, and heavy equipment coverage universe.
Jan 25, 2010 8:14 AM
Lost in the sound of fury of the President's attack on Wall Street was the unexpected news that initial jobless claims jumped again last week.
Even if the decline in jobless claims resumes in the weeks ahead, as we expect it will, let’s not forget that there’s still a big test ahead for the economy. Having rebounded from the apocalypse of late-2008/early 2009, the challenge now is one of creating and sustaining growth that ends up as a net plus. That's a much tougher job than printing money.
Jan 22, 2010 7:24 AM
James Picerno has a close look at one set of indicators that suggests no employment-led boom this year.
Midway through the first month of 2010, there are enough headwinds facing the economy to keep our expectations in check. That includes the dire trend in the tally of the long-term unemployed (out of work for 27 weeks or more), which hit the highest rate since 1948, when data on this series was launched. [...] “This is not your typical cyclical downturn where hiring is just postponed until business improves,” Richard DeKaser of Woodley Park Research tells the Christian Science Monitor. “This is really more about structural unemployment.”
Jan 19, 2010 9:32 AM
Writing in the FT, economists Robert Barbera and Charles Weise say many company leaders reacted irrationally during the post-Lehman panic. When they realize that and regain some of their confidence, the hiring gates could open wide.
The drastic reduction in inventories and payrolls was not, in other words, a result of restructuring: it was symptomatic of panic, the same panic that caused the massive sell-off in equities, corporate bonds and mortgage-backed securities.
Jan 12, 2010 7:32 AM
An analysis by the AP shows that the stimulus dollars put to use on construction and infrastructure projects isn't having an appreciable employment impact.
Even within the construction industry, which stood to benefit most from transportation money, the AP's analysis found there was nearly no connection between stimulus money and the number of construction workers hired or fired since Congress passed the recovery program. The effect was so small, one economist compared it to trying to move the Empire State Building by pushing against it.
Jan 11, 2010 12:47 PM
David Rosenberg at Gluskin Sheff says the nitty gritty of Friday's disappointing employment report was even more discouraging than the headline payroll number, which has a large-company bias. Looking at the so-called household survey provides a broader view at the market.
... [T]he trends in orders, output, sales and employment have been far less robust than has been the case for big businesses, which have greater access to credit and exposure to the global consumer. On this basis, employment showed a massive 465,000 decline in December and down exactly three million in the second half of the year.For a long-term look at the labor force participation rate, check out this graph from Calculated Risk.
Jan 11, 2010 10:28 AM
Larry Kudlow says the stimulus approach isn't working.
In light of all the tax-and-regulatory threats, it’s too expensive to hire right now. So get rid of all the so-called stimulus plans and social policies to transform the government’s relation to the private economy. Remove these obstacles.
Jan 11, 2010 9:15 AM