Many corporations that could not hire people a year or two ago can hire them now, but even healthy firms may wait well into the year to see what happens to the broader economy. There is still too much talk about a “double dip” for many business executives to feel comfortable spending on anything but the basics. Many American companies may have found that they can get along with less. The great recovery cycle t
hat began in 2000 and accelerated in 2003 took US GDP from $9.2 trillion to just about $14 trillion last year. Many businesses were understandably exuberant and added jobs according.

But, in 2007 and 2008, companies had to test how well they could survive with their belts cinched on the last notch. Nonfarm business sector labor productivity increased at a 6.9% annual rate during the fourth quarter of 2009, the U.S. Bureau of Labor Statistics reported on March 4. The number is a remarkable example of how much an enterprise can squeeze from each of its workers.

The squeezing process is likely to go on at many companies and in many sectors. Workers are not stones and there may be more blood to be wrung out of them. People still faced with a job market in which 17% of the able-bodied are without full-time work will work longer and for less money than they have at any time in decades.

The federal government does not keep accurate statistics on how many two-family households are now one family households, but the attrition is a reason that household income is not rising. There are hundreds of thousands of homes where there are children to feed and educate with one adult out of work.  It is easy to understand that the other adult will do nearly anything to keep a job. It is an example of the leverage that employers have these days.
The March jobs figure, less the number of people hired by the government to perform the Census, is bound to be unimpressive, and the ability of companies to run successfully on fumes may depress the recovery in the jobs market for some time.

Douglas A. McIntyre