Despite some bullish hopes to the contrary, job gains were no where to be found last month.
Instead, according to the figures, U.S. employers actually cut 85,000 jobs in December, dampening some of the growing optimism that the labor market was firmly on the mend.
That was the belief of many on the heels of a strong November figure that surprised everyone to the upside when only 11,000 jobs were lost . As a result, those surprising figures left economists all over the map this month with forecasts ranging from a loss of 100,000 jobs to a gain of 85,000.
However, those job gains never materialized even though the unemployment rate managed to hold steady at 10%.
But that was only because of 661,000 drop in the work force numbers as more and more people simply stopped looking for jobs. Once people stop looking for jobs, they are no longer counted among the unemployed.
That left the real unemployment rate at 17.3% counting discouraged workers and those part-time employees who would rather work full time.
And while the Labor Department did revise November payrolls to show the economy actually added 4,000 jobs, there really isn’t much getting around the fact that 7.2 million people have lost their jobs over the last two years—-the worst showing since 1944-45 when World War Two ended.
The question now is: when will all of these jobs really comeback?
Some economists think that day could be a long time coming….
From CNNMoney by Chris Isidore entitled: 7 million jobs lost: Gone forever?
“Most economists don’t expect the employment picture to significantly improve anytime this year — or over the next few years for that matter.
The unemployment rate, which stood at 10% in November, is expected to stay uncomfortably high for the foreseeable future. Some experts even suggest that the labor market won’t be able to fully recover from the 7.2 million jobs lost since the start of 2008 before another recession and round of job losses.
Part of that is because the economy needs a gain of more than 100,000 jobs a month just to keep pace with population growth.
The other part of the problem is that there is a large pool of 6 million out-of-work adults who have become discouraged and stopped looking for work and are therefore not counted as unemployed. As employers start hiring again, many of those will flood back into the labor force .That will drive up the unemployment rate.
Gad Lavanon, associate director of macroeconomic research for the Conference Board said he is looking for unemployment at or above 10% all the way through 2010. He doesn’t expect unemployment to return to pre-recession levels of under 5% anytime in the next six years.
“Our forecast is for a very mild jobs recovery probably throughout 2010,” he said. He said low consumer confidence and tight credit will keep consumer spending in check, which in turn will stop employers from adding staff in significant numbers.
“If you look at previous expansions, consumer confidence was at a much higher level than it is now at this point in the cycle,” he said.
A survey of top economists in November by the National Association of Business Economics found 60% don’t expect payrolls to return to pre-recession levels until 2012, and another 35% say it will take even longer than that.”
That being said, it looks like a long slow climb at best….
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