Why the pace of layoffs has slowed
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KAI RYSSDAL: The actual number was 539,000. That’s how many people lost their jobs last month. The way things have been going, not as bad as a lot of experts had been guessing. And this morning’s report does give some credibility to the ‘hey, things are turning around’ school of economic thought.
But the unemployment rate — the number of people out there actually looking for work — shot up to 8.9 percent. That’s the highest that’s number’s been since Ronald Reagan’s first term. The current occupant of the Oval Office pointed out that at least the rate of loss is slowing. But Marketplace’s John Dimsdale reports that a half a million layoffs in one month is still a whole lot of people.
John Dimsdale: For President Barack Obama fewer layoffs mean the economic gears are slowly beginning to turn. But Econoplay forecaster Gary Rosenberger, who gathers his own statistics by talking to employers on the front lines of the economy, sees evidence of a different sort.
Gary Rosenberger: They’re telling us this is not a sign of a turnaround. This is a sign that layoffs have gotten to the point where employers are laying off workers who are really valuable. These are the hardest workers to get rid of.
Which is why the pace of layoffs has slowed. John Challenger at the outplacement firm Challenger Gray and Christmas says companies are doing all they can to avoid letting workers go.
John Challenger: Four-day work weeks, salary freezes. In fact we’re seeing some companies cut their wages 10 to 15 percent.
Because they want to be ready when the rebound occurs.
Challenger: If the people aren’t there they may not have the operations to provide the quality product or service they need. So companies have to be very careful here not to overshoot the mark.
To take better advantage of furloughed workers, Obama called for allowing them to collect unemployment benefits while going to school or taking part in retraining programs.
Barack Obama: The idea here is to fundamentally change our approach to unemployment in this country, so that it’s no longer just a time to look for a new job but is also a time to prepare yourself for a better job.
The president announced a new Web site with education resources for the unemployed, at opportunity.gov.
In Washington, I’m John Dimsdale for Marketplace.
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