Economists Wait To See If Jobs Report Shows Gains
STEVE INSKEEP, host:
Its MORNING EDITION from NPR News. Im Steve Inskeep.
MADELEINE BRAND, host:
And Im Madeleine Brand.
Every month for the past two years the economy has lost jobs, more than seven million gone. This morning the Labor Department will release its job numbers for December and tell us if the country has finally started to reverse that trend.
NPRs Frank Langfitt is with us in the studio to give us a preview.
And you've been studying these reports for years, Frank. Do you think that there will actually be an increase in jobs?
FRANK LANGFITT: Well, we seem to be right around that point, Madeleine. Maybe, if its not this month, in a couple of months. Most analysts, though, think not quite yet. There have been many good signs. Last month were only down 11,000 jobs, and first time claims for unemployment benefits, they've been falling. But there are some private reports that came out this week showing continued job loss in December. So altogether economists kind of expect may be another loss of about 10,000. Could be a small gain, these reports are volatile, and of course these are just estimates. Still, whatever the number is, its clear that the job market continues to improve and recent losses have been really relatively small.
Nothing like what we saw in the worst days of the recession. You remember there were periods where, you know, banks, auto companies, were laying off thousands, and we saw construction practically stop. January, just a year ago, we lost 700,000 jobs in just a month.
BRAND: And the U.S. job market is gigantic, right? I mean we're talking about more than 100 million jobs, although...
LANGFITT: Oh, absolutely - its huge.
BRAND: Yeah. So, is this - so if there's just a small increase, would that be significant?
LANGFITT: You know, you're right. If its 10 or 20 thousand jobs, thats just a drop in the bucket because this is such a dynamic economy. But there are psychological benefits. You know, jobs always lag in recovery. So even when the economy is technically growing, people in the job market dont really feel it. So if there is news that jobs are finally growing, that might boost some confidence in the general public and with businesses. And economics, as we all know, its very psychological. Economists measure things like consumer confidence. People are more hopeful about the future, they might start spending more. And thats really important in the United States economy, because 70 percent of our gross domestic product really comes from consumer spending.
BRAND: Yeah, so people need jobs to keep spending and we keep hearing from you and from economists that the economy is finally on the mend, that it is growing, but that its taking a while for businesses to start hiring again. Why is that?
LANGFITT: There are two big reasons. One goes back to what we were just talking about - confidence. Whats the future of the American economy? People arent sure - is it ever going to come back to the kind of growth and prosperity that we enjoyed just a few years ago? And in the shorter term there's another question - how sustainable is this recovery? Some manufacturers are bringing back workers because inventories have gone down, but once those inventories get bought up again, will there be enough people to continue buying things?
So we do see that we still have problems in the housing market. Credit is tight, and Americans are a lot poorer than they used to be. Another thing is businesses has become a lot leaner, some of them probably permanently. You know, as they cut staff, they put more work on remaining people and they found that they can make it work and save on labor costs. So it remains to be seen whether people are going to staff up the way they were three or four years ago.
BRAND: Meanwhile, the unemployment rate is around 10 percent, I believe nationally. What are the prospects for those millions of Americans out of work?
LANGFITT: Coming out of this recession, its not good. Hiring is expected to be slow, going on into the months of this year. Another big problem is we lost just so many jobs - as you mentioned at the top, more than seven million in two years, and its going to take many more years to make up all those job losses. So a lot of the unemployed people right now are really feeling squeezed. They have fewer jobs to choose from and the population has continued to grow, which means you have more people coming out of college and more competition for fewer, fewer jobs, and businesses that really arent very anxious to start hiring again and increase their costs when they dont know what the economy is really going to look like.
BRAND: NPRs labor correspondent Frank Langfitt, thank you.
LANGFITT: You're very welcome.