The Job Drought May Be Over
norris.blogs.nytimes.com
Jobs paranoia is at a high among Washington politicians. The front of Friday’s Times is dominated by a picture of Ben Bernanke, proclaiming, “Jobs are the issue right now.” The lead article says President Obama is seeking new ideas for job creation.
The report on Friday looks very good, with a decline in the unemployment rate to 10 percent, and only 11,000 jobs lost. With October’s job number revised upward, it was a report that surprised the bears.
In my Off the Charts column in Saturday’s newspaper, I will cite one economic indicator that shows the unemployment rate has peaked. Whether or not that turns out to be the case, I think the bad days for jobs are very close to being over, and that this will not be a jobless recovery.
Why?
One reason is the sheer abruptness of the decline in employment during the recent recession. (Yes, I think it is over.) After Lehman Brothers failed, the unemployment rate rose at a faster clip than at any time since 1975. There was something approaching panic among employers. They feared sales would collapse and that credit would be unavailable. In that spirit, they cut every cost they could. Imports plunged because no one wanted to add inventory. Ad spending collapsed. And people were fired.
That has left many companies in a position where they may need to add workers quickly for even a small increase in business.
Call me the optimist.
(Incidentally, in handicapping the report with colleagues before the announcement Friday morning, I forecast a loss of 50,000 jobs. That was too negative, it turns out, but it was still the winner.) |
