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I'll say the same thing as last month about this chart. According to the ADP survey, job losses in November were lower than the previous months, but the corresponding job loss number to be released this Friday is likely to be not quite as low as the market is currently expecting (-123K according to Bloomberg). Nevertheless, the important thing is that we are seeing continuing improvement, albeit of the slow variety. This supports the widely held view that the unemployment rate is going to remain uncomfortably high for quite some time—well into next year.
2 comments:
Scott,
Unemployment was as high as 9.2% in Sept. 1983, well into that period's recovery from the '81-82 recession. Do you see us following a similar pattern here? Also, it seems even with Reagan's tax cuts, it still took some time for unemployment to go down. Perhaps Obama would see some wisdom in proposing a corporate tax cut to spur job growth (I know it's pure fantasy!)
Job cuts will be worse this time around, because of much less friction in moving production and jobs around the globe. While a company could get away with laying off, say, 150 people in a 500 person plant, now they just relocate the plant and layoff all 500. So many more jobs go than need to. This however is not the fault of the business. The regulatory and tax burden makes that 500 person plant a waste staffed at 350 people. Easing the costs of maintaining that plant would make the relocation lss appealing.
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