U.S. job losses slow way down

TEXT OF INTERVIEW

Bill Radke: All year long, this economy has been shedding jobs — hundreds of thousands per month. That number’s been slowly shrinking. But a few minutes ago, the government announced job losses plunged last month to almost zero. Let’s figure out what this means. On the line with us is the U.S. economist at UniCredit Global Research, Harm Bandholz, live from New York.
Good morning, Harm.

Harm Bandholz: Good morning, Bill.

Radke: The official unemployment rate is still 10 percent, but employers cut only 11,000 jobs in November — the fewest since late ’07, before the recession started. Your reaction?

Bandholz: It is certainly a very strong repot and caught us a little bit by surprise. In addition to this benign job decline in November, the previous two months were revised up by 160,000, so overall a very strong report.

Radke: How do you account for this?

Bandholz: I think that the biggest reason is that companies are reducing the pace of layoffs, after cutting more than 7 million jobs during the recession, and so this is reflected in lower declines and payrolls primarily.

Radke: Why is the unemployment rate still at 10 percent?

Bandholz: Yeah, I mean first of all the unemployment rate eased a little bit compared to October. But 10 percent is still a very high level. I think the biggest problem is long-term unemployed. Among all the people unemployed, 38 percent are unemployed for 27 weeks and more. This is by far the highest value in the statistics.

Radke: So we’re not cheering morning?

Bandholz: I think the market will cheer a little bit, but fundamentally the situation in the labor market is still bleak.

Radke: The president just held a job summit. What do you think this good news will do to the momentum for government job creation?

Bandholz: The government has not too much money left to spend, so this may be a welcome reason that they don’t do too much. But I think some more action is needed, and I actually would recommend the government step up with infrastructure spending.

Radke: Interesting. Harm Bandholz is U.S. economist at UniCredit Global Research live from New York. Thank you very much.

Bandholz: Thank you.