October numbers reduce likelihood of double-dip recession
Graduates look for jobs at a job fair for university students at City hall in Hong Kong, 26 August 2003.
Jeremy Hobson: The U.S. government says the economy added 80,000 jobs last month -- that was the fewest in 4 months. The unemployment rate improved to 9 percent -- that's down from 9.1 percent.
Let's get reaction from Gus Faucher, chief of macroeconomics with Moody's Analytics. He's with us live. Good morning.
Gus Faucher: Good morning.
Hobson: So Gus, what does this report tell you about the job market at this point?
Faucher: The report tells us that the job market is good, but not great. The October number was a little bit weak, but on the other hand we had large upward revisions to August and September. So we're not at any risk of a double-dip recession right now, I think this reduces the likelihood of that.
Hobson: Now, we know that two of the groups that are particularly vulnerable in this economy: workers that are sort of nearing retirement and those younger workers who are just getting out of college -- both having a hard time getting or holding on to employment. Which do you think is in worse shape right now?
Faucher: Well, I think right now the group that's in worse shape is the older workers, A lot of them had to take retirement earlier than they expected so that's going to the a hit to their incomes.
But I think over the longer run it's going to be the younger workers who face the biggest damage from the weak recovery. Research has shown that starting salary is an important determinate of your lifetime earnings, so these young people who are just getting out of school, getting their first job, they're going to take that at a lower salary and that's going to carry with them throughout their careers. And that's going to be a big drag on their earnings over their lifetime.
Hobson: Gus Faucher of Moody's Analytics, thanks so much.
Faucher: Thank you.