Wednesday, November 30, 2011

The employment outlook is improving modestly

I haven't seen any recent reports from the folks at ECRI, but I've got to believe they are getting nervous about the recession call they made a few months ago. Today's news from ADP was a definite upside surprise, in which they report that private sector jobs grew by 206K in November (vs. expectations of 130K), and they revised upwards the prior two months by 35K. Of course even these levels of job growth are puny compared with what we would expect to see in a normal recovery, but it sure is nice that things are improving—however modestly—instead of deteriorating as so many have been fearing. 

The Challenger survey of announced corporate layoffs in November also confirmed that there is no sign of any deterioration in the jobs market.

While I'm on the subject of good news, it is also nice to see that the mortgage purchase index (above chart) has registered some solid improvement in the past several months, albeit from very low levels. Things could be a lot better, to be sure, but a 20% pickup in new mortgage applications—which is echoed in a pickup of pending home sales—is a sign that consumers are able to respond to record-low mortgage rates, and the housing market is clearing.


Cabodog said...

It's interesting to note that hiring and layoffs, per the graphs, are both better than in the "boom" years prior to 2007.

Or, am I missing something?

Scott Grannis said...

I think that has a lot do with the fact that the 2001 recession was very shallow, and thus the recovery wasn't very strong. The deep recession of 2008-9 forced some extreme cost cutting (e.g., lots of layoffs, strong productivity gains) so no need for lots of layoffs now that we're in a recovery, but job gains of 200K/mo. are still pretty anemic given the huge job losses. 200K/mo job gains in the 2003-7 years were neither anemic nor impressive.

RichmondG30 said...

I am also surprised that the levels of announced corporate layoffs during the tech bust in 2001 were higher than during the 2009 recession. They also seemed to persist at a high level for a longer period.

Like you said the 2001 recession was very shallow and unemployment never approached the levels we saw (and are still seeing) in the current downturn.