After Friday's employment summary surprise, James Picerno brings us all back to earth a little. Yes, layoffs are "rapidly fading" and the recession is essentially over, but there's plenty still to worry about.
The hard work is about to begin. As difficult as it's been to return the economy to a state of treading water, that will pale next to the business of promoting non-inflationary growth on a meaningful scale in the years ahead. Simply expanding the labor market to its pre-recession level—roughly 7 million jobs more than we currently have—will require an unusually lengthy and potent expansion. As if that wasn't enough, there's the threat of high inflation, rising interest rates and a hefty debt load on governments and consumers lurking. This isn't going to be easy.For more on how to get the jobs recovery started, check out this discussion on stimulating (or not) the labor market at ThinkMarkets. Among the thoughts: It probably wouldn't hurt us to take a breath and let companies adjust to where the economy is these days.
None of these suggestions exhibits the slightest understanding that labor markets need time to readjust. It is as if, for Krugman, some nasty irrational force has it in for labor employment (the “lagging indicator”). Yet entrepreneurs must figure out what the sustainable lines of production will be after a bubble period. All of this is presumably viewed as a minor issue because the major problem is consumers are too afraid to spend (on what?). Anything will do in Krugman’s world.
Dec 7, 2009 7:23 AM
Jeff Cornwall says attendees of tomorrow's jobs summit shouldn't spend too much time discussing the potential of payroll tax cuts, job-creation tax credits and the like.
It is time to stop trying nuance tax policy. Attempts to steer or direct the economy through tax policy never work. Cut, cut, cut -- this includes both taxes and government spending.
Dec 3, 2009 10:58 AM
Tennessee's unemployment rate was 10.5 percent in October, even with September's number and almost 4 points higher than that of a year ago. The biggest gainers and losers during the month were seasonal sectors: Schools added jobs, leisure and hospitality companies shed them.
Nov 19, 2009 3:09 PM
Economist David Rosenberg, who thinks the jobless rate will soon top 12 percent, breaks down the dynamics of the unemployment rate and the bleak prospects of it falling anytime soon.
Think about it. We haven’t yet hit bottom on employment but that will happen at some point. Employment is not going to zero, of that we can assure you. But when we do start to see the economic clouds part in a more decisive fashion, what are employers likely to do first? Well, naturally they will begin to boost the workweek and just getting back to pre-recession levels would be the same as hiring more than two million people. Then there are the record number of people who got furloughed into part-time work and again, they total over nine million, and these folks are not counted as unemployed even if they are working considerably fewer days than they were before the credit crunch began. So the business sector has a vast pool of resources to draw from before they start tapping into the ranks of the unemployed or the typical 100,000-125,000 new entrants into the labour force when the economy turns the corner. Hence the unemployment rate is going to very likely be making new highs long after the recession is over — perhaps even years.
Nov 11, 2009 11:26 AM
Here are two tidbits that crystallize the state of today's mortgage world, a segment of the financial spectrum that has arguably seen more gut-wrenching, roller-coasting change than any other in the past few years. First, there's the national headline that JPMorgan Chase plans to hire 1,200 loan officers in the next 13 months. The megabank has been among those profiting mightily from the flight to quality and capital. On a more local scale, three-year-old Farmington Financial Group recently announced it has completed its metamorphosis from broker to funder. For founder and President Hart Weatherford, pictured above, the move is in part about "returning to time-honored lending traditions when bankers knew and respected their customers as individuals and worked diligently to earn their financial trust." SEE ALSO: Building anew and JPMorgan's mortgage warning
Nov 11, 2009 7:59 AM
Atlanta Federal Reserve President Dennis Lockhart says commercial real estate's slump will last as long as job creation limps along. But he doesn't see the sector causing another downturn, though its struggles will affect small-business lending.
Unlike residential real estate, there is not the same direct linkage from CRE to household wealth - and therefore consumption - caused by erosion of home equity. However, there could be an impact resulting from small banks’ impaired ability to support the small business sector - a sector I expect will be critically important to job creation.
Nov 10, 2009 12:48 PM
...And come out allies in the battle to preserve America's jobs base. So sayeth the Hoffa:
“We have been forced to make a false choice in the past—good jobs or a clean environment. The pundits said that if we wanted clean air, the economy would suffer and jobs would be sent overseas. Well, look what happened—we let the big corporations pollute and the jobs went overseas anyway. But today is a new day.”
Nov 10, 2009 7:57 AM
Then you don't want to dig into the nitty gritty.
[T]he U.S. population is significantly larger today (about 308 million) than in the early '80s (about 228 million) when the number of part time workers almost reached 7 million. Still - even adjusted for population - part time workers is at record levels.
Nov 9, 2009 7:59 AM