View of the Day: US jobless nears 10%
By Rob Carnell
Published: September 7 2009 20:27 | Last updated: September 7 2009 20:27
The unemployment rate in the US is probably only one or two months away from reaching 10 per cent – and it is likely to rise even further next year, says Rob Carnell, chief international economist at ING.
He notes that the US employment report for August painted a very mixed picture of the labour market, with fewer jobs lost than in July but the jobless rate unexpectedly jumping from 9.4 per cent to 9.7 per cent.
“If we are to see a genuine improvement in labour demand, this will likely show up first in the weekly hours worked data, as overtime will pick up before employment or wages do,” he says.
“But in August, hours worked showed further falls, so it looks as if companies have still not turned the corner with respect to their demand for labour.”
Mr Carnell also points to the household survey within the jobs report, which, he argues, is a more reliable measure of employment than the non-farm payrolls numbers.
This showed a 392,000 decrease in employment, worsening from a 155,000 decline in July.
“We do not expect to see positive jobs growth before next year, and it will probably be another two quarters from the 2009 year-end before the unemployment rate peaks,” Mr Carnell says.
“An unemployment rate of 11 per cent or more is likely to be seen before the rate finally heads slowly down, starting in the second half of 2010.” |
