Dr. Doom sees 11% unemployment for two years
Posted on November 16, 2009 at 12:38 pmNouriel Roubini says the U.S.’ high jobless rate isn’t dropping anytime soon and risks causing a double-dip recession.
Other measures tell the same ugly story: The average length of unemployment is at an all time high; the ratio of job applicants to vacancies is 6 to 1; initial claims are down but continued claims are very high and now millions of unemployed are resorting to the exceptional extended unemployment benefits programs and are staying in them longer.
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High jobless number here to stay
Posted on November 11, 2009 at 11:26 amEconomist 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.
Seeing red
Posted on November 5, 2009 at 11:23 am
Barry Ritholtz passes on a graphic we’d all like to see be much blander.
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One in eight Tennessee factory jobs gone since 2007
Posted on November 2, 2009 at 12:49 pmMore bleak data from the manufacturing sector: Tennessee factories has shed more than 56,000 jobs since September of 2007. The automotive sector accounts for more than 9,000 of those losses and has been laying off workers more quickly than the rest of the industry.
Putting health care reform in its place
Posted on at 10:22 amBehind job creation policies, that is. Robert Reich says the president has spent his political capital on the wrong priority.
The optimist in me says Obama can pivot off a health-care victory and launch some new initiatives that palpably and quickly spur job growth. The realist says there aren’t any such initiatives — at least none that can work fast enough to reverse the tide of unemployment before the midterm elections.
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Don’t believe the bad news
Posted on October 29, 2009 at 9:30 am
Mark Perry says reports of discouraged and disenchanted consumers need to be discounted a good bit. The world looked just as bleak coming out of the last few recessions.
Consumer confidence remained low for two years following the end of the 1990-1991 recession and it took about three years for consumer confidence to rise to the pre-recession level. The circled pattern following the 2001 recession was similar.
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Crunching the numbers on the stimulus’ job impact
Posted on October 13, 2009 at 11:24 amEconomist Brad DeLong rips apart a Washington Post piece and offers up some basic math to help us get a better grasp on how spending trillions of dollars affects our daily lives.
That looks like a very good deal: buying an extra productive job for an American today at a cost of $2000 per year in higher taxes looking forward–particularly when you think that some of those extra jobs build up our productive capacity to make us richer in the future as well.
Mark Thoma follows up with some more perspective on the political dynamics of a crummy labor market:
I don’t understand why the left has allowed its hands to be tied be the GOP’s framing of the stimulus issue. Of course it’s a political non-starter if you don’t fight back and present alternative arguments. There are benefits to stabilizing the economy by shifting demand from the good times to the bad times even if it doesn’t affect future economic growth (one could even argue that slightly lower growth is an acceptable trade off for enhanced stability, but that too is a political non-starter). People need jobs, and we need to put the policies in place - whatever those are - that can provide them.
Banks are hurting small biz’s growth potential
Posted on October 12, 2009 at 9:38 am
Two related bits of info and analysis on the scope and repercussions of banks’ continued tightening of credit. The latest Fed numbers show outstanding commercial and industrial loans have dropped by some $250 billion in the past year. That has been most painful for small businesses, which can’t hit up the bond market to raise capital and create the jobs they have traditionally created coming out of a recession. Or in econospeak:
It’s not clear whether small businesses will continue to play their traditional role in hiring staff and helping to fuel an employment recovery. However, if [...] financial constraints are a major contributor to the disproportionately large employment contractions for very small firms, then the post-recession employment boost these firms typically provide may be less robust than in previous recoveries.
SEE ALSO: Via Milt Capps, a potential solution that would vacuum up leftover TARP cash.
This hotel sector snapshot ain’t pretty
Posted on October 8, 2009 at 11:31 amThe downturn in hotel management is likely to last well into 2011 and has one economist saying up to 20 percent of all hotel loans could default before we’re in the clear.
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Where the jobs will have to come from
Posted on October 5, 2009 at 9:52 amBelmont professor Jeff Cornwall says entrepreneurs will — as they have before — be the driving force behind a true recovery, one that really makes a dent in our painfully high unemployment rate.
So all we need is government to do more, and we will be OK? Sorry, neither big government nor big corporations feeding at the government trough have ever brought us out of a recession and into a sustainable recovery.
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The extent of last year’s mortgage meltdown
Posted on at 7:21 amThe government has tallied the numbers documenting the drop in mortgage activity in 2008. Demand for loans fell by almost a third while the credit crunch claimed a good number of independent lenders.
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Two years of restaurant struggles
Posted on October 2, 2009 at 9:31 am
The recession started early for the restaurant sector. And unlike many other industries, eateries appear to be nowhere near climbing out of their slump.
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‘The infamous nursing shortage has all of a sudden disappeared’
Posted on October 1, 2009 at 8:08 am
Locally based RBC Capital Markets analyst Frank Morgan sheds some light on one of the main reasons hospital-company profits have held up remarkably well during this recession. Labor costs, he tells The Wall Street Transcript, have been “the biggest source of earnings upside” by far.
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Never to return
Posted on September 28, 2009 at 12:48 pmA new survey of more than 1,500 chief financial officers from around the world spits out one of the more disturbing recession-related statistics we’ve seen: A quarter of the jobs lost during this downturn may never be filled.
As a measure of just what it will take to return employment to year-end 2007 levels, CFOs say that, on average, sales revenues will need to increase by 37 percent from current levels in order to justify re-hiring those 6 percent of employees that have been laid off in the past 20 months.
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Four years till the good ol’ days
Posted on September 25, 2009 at 12:22 am
MTSU’s David Penn says it will take the Middle Tennessee job market until 2014 to recreate all the jobs that have been lost during this recession. On the flip side, that creation should begin by the end of the year, Penn told Thursday’s Economic Outlook Conference.
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