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Prospects for Jobs as the Recession Winds Down
by Paul Grasso, October 14, 2009
You may have noticed that an increasing number of economists have been declaring recently hat the recession is over. Among them are:
Ben Bernanke, the Federal Reserve Chairman, was quoted as saying that the "recession is very likely over at this point."
Mark Vitner, a senior economist at Wachovia, stated, "we are in the early stages of the economic recovery."
And Roger Tutterow, a professor or economics, declared that the recession "likely ended in either July or August."
One notable voice is not singing from the same hymnal. Joseph Stiglitz, winner of the Nobel Memorial Prize in Economic Sciences in 2001, has stated that he believes the recession will end in 2012, not 2009! Stiglitz, the former Chief Economist at the World Bank, is currently a professor at Columbia University. According to Newsweek magazine, Stiglitz's work is cited more often than ’Äúany other economist in the world.’Äù
Most recently Stiglitz noted that "we would be lucky to be out of recession by 2012." Many economists have taken exception to Stiglitz's comments. They are quick to point out that a recession is defined as having at least two consecutive quarters of negative growth. Relying on this definition, many economists are now expecting some growth that will, then, mark the end to the recession. Stiglitz responds that they are arguing "technicalities." He argues that a recession is not really over until we have strong job growth and rising wages - something that has yet to be seen. He goes on to predict that there are "many bumps ahead’Äù and that a lack of new jobs will negate the effects of any short-term recovery. His biggest fear is that the United State may experience a "double-dip" recession.
Either way, irrespective of the definition you may accept, it is hard to debate the fact that for a recovery to be meaningful, people will need to be able to get back to work. Only when people begin working will consumer confidence will begin to rise. When that happens, people will start spending their money again.
Unemployment Statistics (NYSDOL Data)
Labor Market Overview (NYSDOL Data)
As reported by New York State’Äôs Department of Labor (NYSDOL), New York State's seasonally adjusted unemployment rate climbed from 8.6 percent in July to 9.0 percent in August 2009, its highest level since April 1983. In August 2009, the number of unemployed in New York State increased to 874,300, their highest levels on record (current data extend back to 1976). After seasonal adjustment, New York State's private sector job count decreased by 2,200, or less than 0.1 percent, to 7,083,300 in August 2009. The statewide total nonfarm job count (private plus public sectors) decreased over the month by 3,800, or less than 0.1 percent, to 8,645,400 in August 2009.
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"Our latest labor market report indicates that employers in New York State cut jobs at a more modest pace than employers nationwide and our statewide unemployment rate remained below the nation's rate. However, the number of unemployed New Yorkers in August reached its highest recorded level," said Peter A. Neenan, Ph.D., Director of the Division of Research and Statistics.
According to data released by the Bureau of Labor Statistics (BLS), national job losses continued in September and the unemployment rate continued to trend up, reaching 9.8 percent. In addition,
- Job losses continued in September and the unemployment rate continued to trend up, reaching 9.8 percent.
- In September, notable job losses occurred in construction, manufacturing, government, and retail trade.
- Nationally, construction employment decreased by 64,000 in September. Job losses averaged 66,000 per month from May through September, compared with an average of 117,000 per month from November 2008 through April.
- Employment in manufacturing declined by 51,000 in September. Job losses in factories averaged 53,000 per month over the past 3 months, about one-third the average monthly decline from October through June.
- In September, retail trade employment fell by 39,000. The industry has lost an average of 29,000 jobs per month since April, down from an average loss of 68,000 for the prior 6-month period.
- Employment in government decreased by 53,000 in September. Much of the decline was in local government.
- Employment continued to increase in health care (19,000). The average monthly job gain thus far in 2009 is 22,000, compared with an average monthly gain of 30,000 during 2008.
The unemployment rate continued to trend up in September. The jobless rate has doubled since the start of the recession to 9.8 percent. A total of 15.1 million persons were unemployed in September, twice the number at the start of the recession.
The number of long-term unemployed (defined as that involving people out of work and looking for work for 12 months or more) rose to 5.4 million in September. This group has grown more than four-fold since the start of the recession.
In September, the employment-population ratio continued to decline. At 58.8 percent, the ratio has fallen by 3.9 percentage points since the recession began, and is at its lowest level since January 1984.
Among the employed, there were 9.2 million persons working part time in September who would have preferred full-time work. While the number of such workers has been little changed since March, it has nearly doubled since the start of the recession.
The BLS concluded that the labor market remained weak in September. Payroll employment fell, and the unemployment rate continued to trend up. The biggest unknown is figuring out what sectors are going to create the millions of jobs to get people back to work. Will it be manufacturing and, if so, manufacturing what? Will it be construction ’Äì retail? The second biggest unknown is predicting how long it will take to accomplish ’Äì months or years? Only time will tell.