Some people expect that the economy may recover in the fourth quarter based on modestly positive unemployment numbers for August. GDP may actually pick up by 3% or 4% some optimistic experts claim. There are a number of facts that mitigate against an upbeat view. Housing and consumer confidence are certainly among them.
But there is no better indication of the future of the jobs markets than the views of the people who run American companies. Their outlook is not terribly positive, according to new research by Manpower. “Of the more than 18,000 employers surveyed, 15% anticipate an increase in staff levels in their Quarter 4 2010 hiring plans, while 11% expect a decrease in payrolls, resulting in a Net Employment Outlook of +4%,” the report says. The balance of the companies have no plans to hire or fire.
These statistics do not a jobs recovery make. The most telling number is that seven of ten companies will maintain static job levels. Figures from the Bureau of Labor Statistics show that America has lost more than 8 million jobs since the beginning of the recession. Several million people have stopped looking for work. As unemployment insurance lapses for these people once they have been jobless for 99 weeks, they have no means of support. And there are the millions of people who work part-time but seek full-time jobs. The unemployment picture cannot improve if the huge majority of companies do nothing. The economy has to add more than 200,000 jobs a month to make any progress in solving the unemployment problem, and it needs to do that every month for three years to put the labor portion of the economy back together.
The Manpower numbers are another indication that the caution among employers is profound and that companies still have no incentive to hire. There are only two things that will change it. The first would be a sharp rebound in GDP that would effect a broad number of industries. The other is a series of jobs programs from the federal government which would give companies direct and tangible incentives to add full-time employees. Neither of those things can be seen on the horizon.
Douglas A. McIntyre