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Unemployment may be nearing bottom
Crowds wait to apply for jobs outside the New York Department of Labor in the Bronx in New York City.
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CORRECTION: The audio version of this story misstates the number of jobs that Dave Huether of the National Association of Manufacturers said have been lost in the manufacturing sector during this recession. The text below has been edited to include the correct figure.
TEXT OF STORY
Bob Moon: Yes, you heard me right a moment ago: 12.5 million Americans are now looking for work. The unemployment rate hasn't been this high in more than a generation. More than 650,000 jobs were lost in the past month.
Still, as bad as it is, our D.C. Bureau Chief John Dimsdale offers us this ray of hope from Washington:
Some see signs of a bottom.
John Dimsdale: After Bureau of Labor Statistics Commissioner Keith Hall delivered the bad news to the congressional Joint Economic Committee, Representative Carolyn Maloney asked two questions:
Carolyn Maloney: Are there any bright spots in this month's jobs report? Is there any good news in our economy?
Keith Hall: There are very few bright spots, if any in this report. Labor market weakness is deep and broad across all industries and all demographic groups.
Thirty percent of all the jobs lost since the recession began have been in manufacturing, says Dave Huether with the National Association of Manufacturers.
Dave Huether: The decline that's already taken place is actually greater than the average decline of all the recessions in the post World War II era.
Some economists predict at least a 9 percent jobless rate by this summer. Jon Fisher, who teaches business at the University of San Francisco, says that's the result of last years' hits to housing and banking.
Jon Fisher: There is a limit to these things and I think the data we're seeing in unemployment and related data is indicative to past damage in our economy and not that the economy is getting worse and worse. So I think we are nearing a bottom, both in the national unemployment data as well as the severity of the market corrections.
Fisher says now that construction is at a standstill, housing demand will finally out pace supply. And that should create jobs. He thinks stock market investors are overreacting to where we've been, rather than focusing on where we're going.
In Washington I'm John Dimsdale for Marketplace.
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Why aren't we having a discussion about the structural changes of the economy and it's impact upon our quantity and quality of jobs? Why have we lost so many manufacturing jobs? Why has Detroit become so innovation-adverse? What has business leadership done (or not done) that has led to these situations? I have my bias - but it is perception, not fact. Home Depot recently decided to close all 30 some EXPO design centers - despite the fact that a good number of these centers were profitable. Why didn't they do the work to turn the business around instead of just kicking it to the curb? Was it sheer laziness or the impact to executive compensation? Or something less apparent. That was 7,000 jobs that will hit unemployment in the next few months....plus thousands from their suppliers - many of whom may go out of business. Is this typical of executive decision-making in the US these days?
Although I would like to believe that Mr. Fisher's comments were true, but it's truly absurd to agree with that.
The problems with his assessment are many fold, but not the least of which will be employers reluctance to rehire people, particularly in the manufacturing sector.
Added to this will be the slow and painful contortions that it takes to "let the system work."
The jobs and salaries that have been lost will take many years to recover, barring some aggressive policies by government.
The jobless rate will only continue to rise for a while till the economy bottoms out. If GM truly bankrupts, it may be the end of 2010 or beginning of 2011 before the economy will bottom out, due to the tidal effect upon secondary and tertiary manufacturers.
Many companies have done little to actually make their services and products more affordable and are unlikely to do so. This includes insurance companies and worst of all utilities. Added to this mix is still yet increasing taxes of every variety.
I don't know if President Obama (or any president for that matter) has the real ability to halt this steady march.
The worst really has yet to come.
