Jobs – going nowhere in a hurry

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On Friday the U.S. Labor Department reported that nonfarm payrolls (jobs) increased by 39,000 in November. In order to put the latest data in perspective, Chart of the Day provided a comparison of nonfarm payrolls following the end of the latest economic recession (i.e. the Great Recession – solid red line) with the prior recession (i.e. 2001 recession – dotted gold line) and the average post-recession from 1954–2000 (dotted blue line).

As shown, “the current jobs recovery is much weaker than the average jobs recovery that follows the end of a recession” and is also “following a path that is similar although slightly stronger than what occurred following the recession of 2001”. “Another important point is that over the past 11 months (i.e. since the beginning of 2010) the trend in jobs is up – slightly,” said Chart of the Day.

Source: Chart of the Day, December 3, 2010.

The emphasis is definitely on “slightly” as shown by the chart below from Calculated Risk (via Business Insider – Clusterstock), indicating a rather flat recovery curve.

Source: Business Insider – Clusterstock, December 3, 2010.

The last words go to David Rosenberg Chief Economist & Strategist of Gluskin Sheff & Associates: “To be sure, job market conditions have improved, but the reality is that the preponderance of the employment gains in the past six months has been in part-time positions. The trend in initial jobless claims has receded, which is encouraging indeed but they are not yet at levels consistent with a sustained decline in the unemployment rate.

“As an aside, we find it amusing to hear about how the four-week moving average on claims has declined to 431k – where it was in August 2008 when the U.S. economy was only nine months into recession and Hank Paulson was brandishing his bazooka. Indeed, the jobless rate remained well above the 9% threshold in November, which marks the 19th month in a row this has happened establishing a new (and rather dubious) record for the post-WWII era. What a recovery!”

In the bigger scheme of things, the meeting of the Federal Open Market Committee (FOMC) on December 14 will is almost guaranteed to not see any changes to the current monetary policy stance of the Fed.

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