Job market outlook for 2010 is bad : Bad Credit Advisor

Job market outlook for 2010 is bad

Come on now, how many times you have heard about those green shoots of recovery, popping out here and there, and that the ongoing recession isn't as bad as certain circles in the media want you to believe. I agree with the latter, this recession is much worse than anything United States has encountered. There are two major factors that are quite intertwined. The first one is our model of consumer based economy which is a bad joke to begin with, is over. The second, the jobs that are lost are not coming back, they are lost, period. And job market outlook for 2010 is bad, so do not be fooled by the November Job Report from the Bureau of Labor Statistics (BLS) which said that only 11,000 jobs were lost and we are on the road to recovery. Many industry gurus are saying that this report smells fishy, like it was literally fabricated to make things look good. But even considering that to be the case, unemployment rate in the United States fell to 10% from 10.2% in November. In real numbers, considering the people who have stopped looking for work or work part time, the real unemployment rate is now stands at something like 17%.

So why I think job market outlook for 2010 is bad? Here are few numbers and facts I found around.
1. Between October and November 2009, close to 300,000 U.S. workers disappeared from the labor force.
2. The National Institute of Purchasing Managers survey, which is a solid indicator of near-future economic activity, shows that employment in the service sector fell during November - contrary to the BLS report which claims that service sector added over 50,000 jobs.
3. Many if not the majority banking jobs that were added are the people that will be dealing with the huge and growing backlog of home foreclosures. The new hires will be doing mortgage restructuring and modification, and considering that 1 out of every 8 homeowners in the country is behind on mortgage payments, this is not a job growth to brag about.
4. Real job industries and that what I call goods producing sectors lost almost 70,000 jobs according to the BLS report, almost equally divided between manufacturing and construction. Yet according to the same report, recovery was lead by manufacturing. I personally don't think we even manufacture anything anymore.
5. The killer for job market outlook for 2010 was ADP, the largest processor of payroll information in U.S. It publishes a totally independent and very reliable survey of employment based on its own data. According to their report, we lost some 170,000, not only 11,000 as per the BLS survey.
6. The level of underemployment is huge, nothing like that ever happened before. I am talking about part time workers and people who work full time but took a huge pay cut. I do not think they will be the consumers who as the President put it just yesterday, spend us out of recession. And how many people are underemployed? Lowest estimates are in the vicinity of 20% of entire workforce, and the highest ones push the figure closer to 30%. U.S. airlines are not buying just Boeing planes, but Airbus as well. That might work in the Times of the Plenty, but hardly will help now.

The jobs, and I am talking about highly paid jobs are not coming back. We have to compete globally in everything from manufacturing to computer sectors. Several Indian IT outsourcing companies stated they are looking forward to a combine one billion US dollars in work orders, mostly from banks and financial companies.

We have to face the cold truth. Most of the wealth was created by home value valuations and real estate speculative prices that allowed us to borrow or sell then spend, and financial products which no one ever understood including those who created them. So in effect we had a trickle-down prosperity which ended with the bubble. Now we have left to face the music.

So yes, job market outlook for 2010 is bad and no green or construction jobs will be enough to make up for what was and still being lost. People psychology won't let them spend money. They will save it. The only way we can create another bubble is to give every U.S. citizen over 12 years old a personal digital dollar printing press with unlimited paper and ink. Then we will see the really green and dense jungles of economic recovery. And I am only half kidding.

Wed Dec 9, 2009 10:12PM by Tony | More in Economy | Comments (0)

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