BOB MOON: A leading job placement firm is reporting this morning that employers eliminated almost two percent more jobs in May than they did the previous month. That from Challenger, Gray and Christmas. Meantime, the payroll firm ADP found private employers added a scant 38,000 jobs last month. Glass half full, or half empty?
Let’s put that question to Mark Zandi, chief economist at Moody’s Analytics. Mark, which way do you see these latest job indicators?
MARK ZANDI: Well, these numbers are disappointing. I had expected better numbers, it clearly shows that the economy has slowed in the spring and early summer. I think the fallout from the higher oil and food prices are quite negative. And of course the Japanese quake had a big impact on the auto and manufacturing base. So, pretty tough numbers.
MOON: Well, how much of this was the Japanese fallout and what are the other problems here?
ZANDI: Well, I think the Japanese fallout was significant. We saw a decline in manufacturing employment in the EDP and we’ve been getting consistent job growth up until this point. So my guess is 20-, 30,000 jobs were lost in the month because of the Japanese quake. I also think the fallout from oil and food prices is quite significant. In many parts of the country we had $4 a gallon of regular unleaded at the beginning of May. And I think that’s a key benchmark for people. It hurts the collective psyche. People pull back and I think that’s reflected in the job numbers.
MOON: Quickly, the magic question here — what do we need to do to turn this around?
ZANDI: Well, fortunately oil prices are down. The Japanese are recovering from the quake, so I think these forces are now starting to move in the other direction and that should be helpful. I do think everything is in place for better job numbers. I think we just need to give the economy some time.
MOON: Mark Zandi at Moody’s Analytics. Mark thanks.
ZANDI: Thank you.