America’s battered labor market

September 8, 2009

David Rosenberg of Gluskin Sheff analyzes thusly:

1) Jobless claims stuck at 570k — basically in line with a sustained 200k-300k payroll losses.

2) Temp agency job losses are continuing even if at a slower pace — this is not good news.

3) Downward revisions to the prior data — these tend to feed on themselves.

4) No change in the record-low workweek.

5) The Challenger and JOLTS data reveal an ongoing decline in hiring intentions.

After last Friday’s report, we have now lost 6.9 million positions that have been cut during this recession and we have to count in the additional 2.5 million jobs that need to be created — but never were — just to absorb the new entrants into the labour market. The ‘real’ unemployment rate is now 16.8%, so to suggest that this down-cycle was anything but a depression is basically a misrepresentation of the facts.

Me: Maybe jobs will snap back. But given structural/longer-term changes in housing, finance and autos, that just seems unlikely to me.  Lots of entrepreneurial effort needed. But is the stage being set for less innovation rather than more?

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