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Saturday, November 08, 2008

Jobless Rate Highest in 14 Years - NYTimes.com

Jobless Rate Highest in 14 Years - NYTimes.com: "Gloomy enough was word from the government on Friday that a fresh 240,000 American jobs disappeared in October, the 10th consecutive month of retrenchment. It brought the toll of lost jobs to 1.2 million for the year — more than half in the last three months alone — while the unemployment rate climbed to 6.5 percent. Worse was the sense that little could be done near term to alter this now-accelerating trajectory."

Helge: I've seen estimates that the unemployment rate could climb over ten per cent, a double of the present situation

NYT: President-elect Barack Obama, speaking at his first news conference since winning Tuesday’s election, sounded resigned to inheriting a starkly troubled economy when he moves into the White House next year. “It’s not going to be quick, and it’s not going to be easy to dig ourselves out of the hole that we’re in,” Mr. Obama said, calling for swift passage of spending measures aimed at stimulating the economy, including another extension of unemployment benefits.

Helge: There is no quick fix! I agree.

NYT: But while experts said this could soften the damage, it was unlikely to change the fundamentals. They said the economy would probably lose several hundred thousand jobs a month well into next year, taking the unemployment rate to near 8 percent — a level last seen a quarter-century ago. “The economy is slipping deeper into a recessionary sinkhole that is getting broader,” said Stuart G. Hoffman, chief economist at PNC Financial Services Group in Pittsburgh. “The layoffs are getting larger, and coming faster.”

Helge: 25 years ago unemployment rates came to over 8 per cent.

The health care industry, mining and public schools were the only sectors that showed more than modest growth last month. Otherwise, losses were deep and broad. Manufacturing jobs shrank by 90,000, construction by 49,000, retail by 38,000 and the financial industry by 24,000.

Helge: I understand the importance of wellness and healthcare as a job provider in the future. The same applies to our country.

The outlook is troubling in part because a new atmosphere of tightness in American banking could prevail for years, say analysts, crimping economic growth. Economists tend to think in terms of a natural cycle of commerce, with businesses investing aggressively when money is abundant, pulling back when times are lean, then jumping back in when fresh opportunities emerge. This time the money may be particularly slow to return.

Helge: What will be the survival model if money isn't available for businesses to invest and grow? Are we going to see very new business models with growth potential without big investments? Is new kinds of service and wellness industries emergin and rising?

NYT: The number of unemployed Americans leapt in October to 10.1 million — the largest number since 1983.
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