More on the weak U.S. labor market
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.