MNeagle
6th May 2010, 04:48 PM
Even With Goods Jobs Report Friday, Full Employment May Not Return Until 2015, Avent Says
Lost in Thursday's market drama was the importance of Friday morning's April jobs report. Economists forecast the government will add 180,000 to 200,000 jobs, which would be the first gain in jobs since the recession began in 2008. “That’s the right neighborhood†for the jobs-number estimate, says our guest Ryan Avent, online economics editor for the Economist.
But as Avent tells Aaron in the accompanying segment, it's unlikely the economy will add the 300,000 jobs needed, consecutively for several months, to recover the 8 million jobs lost during the recession.
Why?
For one, America is recovering from an especially deep recession, Avent says. "Output declined at a rate we hadn't seen really since the Great Depression," he says.
Second, unlike the 1980s recession that was marked by inflation and high interest rates, there's no easy exit strategy for this downturn. "Once the Fed sort of takes its foot off the brake, the economy snaps back and hiring comes with it. We're not going to see that this time around. Growth is going to be a lot slower. ... It's going to take us a lot longer to get back to full employment," Avent says.
"We may not get to full employment until the middle of the decade," he adds. The magazine explored America's changing labor market in a recent article that asks, "Is America's job machine broken?"
Click "more" to get Avent's take on the risks of prolonged unemployment at 9.7 percent, and how President Barack Obama will likely still be battling high unemployment during the 2012 election.
http://finance.yahoo.com/tech-ticker/even-with-goods-jobs-report-friday,-full-employment-may-not-return-until-2015,-avent-says-yftt_480446.html
Video at link too.
Lost in Thursday's market drama was the importance of Friday morning's April jobs report. Economists forecast the government will add 180,000 to 200,000 jobs, which would be the first gain in jobs since the recession began in 2008. “That’s the right neighborhood†for the jobs-number estimate, says our guest Ryan Avent, online economics editor for the Economist.
But as Avent tells Aaron in the accompanying segment, it's unlikely the economy will add the 300,000 jobs needed, consecutively for several months, to recover the 8 million jobs lost during the recession.
Why?
For one, America is recovering from an especially deep recession, Avent says. "Output declined at a rate we hadn't seen really since the Great Depression," he says.
Second, unlike the 1980s recession that was marked by inflation and high interest rates, there's no easy exit strategy for this downturn. "Once the Fed sort of takes its foot off the brake, the economy snaps back and hiring comes with it. We're not going to see that this time around. Growth is going to be a lot slower. ... It's going to take us a lot longer to get back to full employment," Avent says.
"We may not get to full employment until the middle of the decade," he adds. The magazine explored America's changing labor market in a recent article that asks, "Is America's job machine broken?"
Click "more" to get Avent's take on the risks of prolonged unemployment at 9.7 percent, and how President Barack Obama will likely still be battling high unemployment during the 2012 election.
http://finance.yahoo.com/tech-ticker/even-with-goods-jobs-report-friday,-full-employment-may-not-return-until-2015,-avent-says-yftt_480446.html
Video at link too.