Private U.S. firms cut more jobs in Sept.
TEXT OF INTERVIEW
BILL RADKE: Let’s say good morning to economist Richard DeKaser of Woodley Park Research, joining us live from Washington, D.C. Hi Richard.
RICHARD DEKASER: Good morning.
RADKE: 39,000 private jobs cut. Will you put that number into context for us, how bad is this report?
DEKASER: Well it’s disappointing naturally and it’s the worst number we’ve seen since January and the first decline that we’ve seen since January of this year. But two caveats. First, as economists are always quick to remind people, employment is a lagging indicator, so to a certain extent this really just affirms with what we’ve seen in so many other indicators — with the housing slump and a fall back in consumer spending during the summer months. And also this particular indicator, this ADP report, has been much less reliable than usual of late. It’s under-predicted reality, that is the official government number in 10 of the past 12 months, and by a pretty sizable amount by over 70,000 jobs.
RADKE: OK, but Richard, a lagging indicator, of course, doesn’t help somebody out of work. And I want to know because we get teased with little signs of recovery — corporate earnings have been up, the stock market’s been healthy — what’s it going to take for companies to hire?
DEKASER: It’s going to take consistently strong growth. And by that I mean GDP gains of 3 percent or better. The year started with nice growth around 4 or 5 percent, then we had a summer slump with growth settling back around 2 percent. We really need to see that consistently over 3 percent. And the stock market seems to be somewhat encouraged that we might be moving back in that direction.
RADKE: OK. Well, we hope so. Richard DeKaser of Woodley Park Research, thanks.
DEKASER: My pleasure.
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