The New Normal: Jobless Recoveries

http://online.wsj.com/article_email/SB10001424052748703735004574574311468146726-lMyQjAxMDA5MDAwNDEwNDQyWj.html

We began this decade with a post 9/11 jobless recovery and we're ending it the same way. James Bullard, who is president of the St. Louis Federal Reserve Bank, says this is the third consecutive "jobless recovery". As Mark Gongloff argues in the article attached, companies fired workers too aggressively this time, but they show little inclination to rehire, even though the recession has supposedly been over for 5 months. Obviously, globalization and technology have made it increasingly easy for companies to slash labor costs.

As we have indicated in prior posts, the job market is getting "less bad" but we are still losing 125,000 jobs per month (current estimate). The BLS (Bureaus of Labor Statistics) data scheduled for release today should have unemployment holding at 10.2%. If we accept that the current recession began in November, 2007, job losses since then amount to 7.4 million (other estimates are as high as 8 million).

A record 9.3 million people are working part time because there is nothing else available. Since May, more than a million people have left the labor force.

Given all of this, there are 3 numbers that Wall Street will be watching closely in today's BLS announcement:

Temporary Services: Employers added 34,000 temporary jobs last month, the third srtaight month of rising temporary employment. Temps are generally seen as a leading indicator of job market turnaround because they are the last thing employers do to avoid hiring full time employees.

"U6": This is the measure of unemployment that includes people who have stopped actively searching for work, or are working part-time because they can't find full-time work. This number hit 17.5% in October. This is the government's broadest measure of labor underutilization.

Average Work-Week: Like "temps", this is considered a forward looking gauge of the labor market. In both September and October, the average work-week has stayed at 33 hours - that's the lowest level since World War II. Again, employers would rather add to the hours of current employees than hire new ones.

Something could show up in today's BLS numbers that would show more of a positive trend (as has been the case with temps). Looking at average work-week hours could be a clue.

In the meantime, where do the new jobs come from? As we have emphasized in earlier posts small businesses (or new businesses) lead the way but it is hard for them to do that with tight credit. While the White House yesterday was holding a meeting on the job situation, the Treasury Department could have emphasized easing credit to small business ahead of saving the big banks over the past year.

And, on the subject of saving our too big to fail financial institutions, doesn't it seem strange that those same institutions are using and have used bail out money to lobby Congress NOT to pass new regulatory oversight bills? Do we have any idea what we're doing in government?

Have any new oversight agencies been created? Maybe "jobs" could be created in new oversight agencies - there's a concept!