December 14, 2009

THE NEXT GREAT BOOM WILL FOLLOW THE END OF THE WoT, THE HIKE IN GAS TAXES AND AMNESTY:

Jobs Are on the Way! : The nattering nabobs of negativism are ignoring the facts.
(Daniel Gross, Dec 12, 2009, NEWSWEEK)

[T]he data suggest that the economy, now growing at a rate above its historical trend, may be creating more jobs than are being lost. Companies shed only 11,000 payroll jobs in November—the smallest drop since late 2007. For the past three months, the government's first estimate of job-loss figures has been high; when the November numbers are revised, there may be a job gain. Labor-market recoveries are always a lengthy four-step process. First, as businesses stabilize, they fire fewer people. First-time unemployment claims are still elevated, but the four-week moving average is 474,000, the lowest in more than a year. Second, when demand begins to pick up, businesses prod existing workers to work harder. Which is why we've just witnessed the fastest two-quarter productivity surge since 1961. Third, when growth persists, bosses give part-time workers more hours or bring on temporary workers. In November, the economy added 52,000 temporary jobs, the largest addition since 2004, and retail hiring for the Christmas season is up 37 percent this year.

The final step—adding full-time positions—is happening now. Services account for about 86 percent of jobs. And it's here, not in the shrunken housing and finance sectors, where the employment recovery is taking hold. The Bureau of Labor Statistics said that the service sector added 58,000 jobs in November, the second straight month of growth. Among the new service workers are the 240 employees of the Elysian, a 188-room luxury hotel that opened Dec. 9 on Chicago's Gold Coast. [...]

There's also a more abstract force weighing in favor of pessimism: a collective failure of imagination. Sure, the macroeconomic numbers seem to be setting the table for job creation. But where are all the jobs going to come from? The forces that drove job creation in the past—the housing boom, easy money, reckless lenders—are no longer with us. And it's hard to identify that one giant engine—the next Internet or housing boom—that will ignite growth.

Posted by Orrin Judd at December 14, 2009 5:58 PM
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