2010 job outlook: 'There is reason for hope'
John Challenger of Challenger, Gray & Christmas.
TEXT OF INTERVIEW
Bill Radke: And the fight for 3PAR is not an isolated case -- we're actually seeing a summertime flurry of mergers and acquisitions. You may have heard about Intel taking over the security software company McAfee. Then there's the global kings of mining and fertilizer doing some kind of mining-fertilizer mating dance and there are other deals going on as well.
While it is nice to see companies investing in something, let's not forget that with mergers usually come layoffs. Companies merge in part so they can be more efficient, meaning they don't need as many employees. Now the idea of becoming a suddenly unnecessary worker is a scary thought right now, but maybe the situation is not as scary as we media would have you believe.
This morning, the outplacement firm Challenger, Gray & Christmas released its annual "Labor Day Outlook." And its conclusion is -- this miserable job market? It's actually recovering faster than you think.
The CEO of the company is John Challenger -- hello.
John Challenger: Hi Bill. Nice to be with you.
Radke: A jobs recovery is underway? How do you figure?
Challenger: Well, by most accounts, we're barely a year into the recovery. At this point, the previous two recoveries -- following the '91 and 2000 recessions -- the job market was actually getting worse. But it seems like so many people are caught up looking at the weekly and monthly numbers that they fail to look at the bigger trends, which indicate just how much the job market's improved over the last year.
We've seen 654,000 new jobs created. And those jobs are getting created are occuring much sooner than when compared with the 2001 recession. At the end of that 2001 recession, it took 21 months before the economy began to add jobs. We actually started adding jobs just six months after the end of this recession.
Radke: I remember asking an economist, "If I had told you a year ago that weekly new unemployment benefits cliams would still be around half a million..." She said, "No way." I don't want to get too lost in the numbers here, but isn't it jsut bad?
Challenger: This was a very deep recession with more people out of work. But if you look at the numbers, in terms of what's changed in the last year, we're averaging right now, the four-week number spot, 481,000 jobless claims. That's 85,000 less than we saw last year at the same point, Aug. 15.
Radke: OK, so some job growth is happening. Where's that happening? Where are those jobs being created?
Challenger: Well, I'll just tell you where the strongest industires are for growth. The export economy is crucial to the U.S. economy in the next period of expansion. In fact, probably, throughout the next century, our economy is going to have to grow, in part, because we supply goods and services to emerging and growing counries around the planet. But also, health care is a very strong industry. Likely to be one of the sources of real growth and the next expansion. Energy is another industry, where there's going to be real investment and growth and jobs.
Radke: But John, didn't we dig ourselves such an enormous hole that even some improvement -- we're not wrong about the suffering are we?
Challenger: No, we're certainly not wrong about just how difficult it's been, how many Americans are out there right now, who are struggling, who haven't found jobs. But there is reason for hope, because it's getting better at a much faster clip coming out of this recession than it has for unemployed people in previous recessions.
Radke: All good to hear. John Challenger of Challenger, Gray & Christmas. Thanks for the time.
Challenger: Thanks so much for having me.