More on the weak U.S. labor market

September 8, 2009

This analysis from Ed Yardeni:

Based on the previous two cycles, the unemployment rate should peak in 15-19 months, or sometime between September 2010 and January 2011! When might employment recover? The previous two experiences suggest this might occur within the next 11-21 months after June, or between May 2010 and March 2011.

Is that too pessimistic? The optimists argue that companies may have fired too many workers, and will have to scramble to rehire once the economy improves. So far, during the first 20 months of this recession, payroll employment is down a whopping 6.93mn vs. total losses in employment of 2.71mn and 1.57mn during the downturns at the beginning of this decade and the previous one. Debbie and I expect that this recovery will be much more “jobless” than the previous two. The industries that have cut back the most (durable goods manufacturing, construction, and retail) are inherently labor intensive, and they are likely to remain in intensive care for quite a while.

2 comments

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As long as our Government encourages industry to go elsewhere to take advantage of low wages and even lower environmental standards, we American workers will have little to stave off starvation but crime and theivery. How is it that blue collar folks forecast this reality as far back as thirty years ago? I did as well! Now, with the stranglehold business has on the government there’s little hope for America ducking the description as 3rd world. Perhaps we’re being conditioned for the arrival of our new owners,,,,the Chinese!

Posted by RH Pyle | Report as abusive

I think that the fate of the economy still comes down to jobs and the consumer, and since there is no catalyst for employment growth in the US, and so many people will be using up their unemployment benefits soon, the Fed is going to choose to print more money to try to avoid deflation. And one of the few ways for the average person to maintain his or her wealth, in my opinion, is to invest in the area that should benefit most from the money printing, which is gold. There are some articles at http://www.goldalert.com that further discuss the employment picture, the Fed’s policies and its potential effects on the gold price.

Posted by jturner | Report as abusive