Marketplace Scratch Pad

What a jobless recovery looks like

Scott Jagow Jan 8, 2010

The job market’s recovery is like waiting for Santa Claus to arrive or the doctor to come into your room. It feels like it’s never going to happen. Let’s take a further look at today’s unemployment numbers.

At a speech today, Boston Federal Reserve Bank’s CEO Eric Rosengren explained that the labor market’s response looks more like the recessions of ’91 and ’01 than ’75 and ’82, as seen in his chart below. The second chart points out how more people are working part-time, as companies try to do more with less.

A perfect example of the current business mindset is UPS. Today, UPS reported a brighter revenue outlook, but also said it was cutting another 1,800 jobs from its workforce of 340,000. More from the Wall Street Journal:

Here is a healthy company that is shipping more products, raising shipping rates and enjoying a rallying stock price and yet it is cutting jobs, not creating more of them…

White House economic adviser Austan Golsbee told CNBC this afternoon that the “main driver” of job creation will be when companies believe the economy is recovering. But UPS just stated today it believes the economy is healing gradually.

Talk, of course, is cheap. Hiring employees is a much more costly wager on the economy’s health-one that even robust companies, like UPS, aren’t willing to make.

So, what it’s going to take? Not more government stimulus, according to some:

“A lot of stimulus still has to be spent. Let the private sector handle it from here,” said Tom Higgins, chief economist with Payden & Rygel… Unfortunately, people just have to be patient.”

And Springer said no amount of money from Washington can change the fact that consumers appear to be adjusting from a pattern of wanton spending to a more thrifty existence.

But, as I wrote earlier today, if this new frugality is permanent, what does that mean for the job market?

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