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The Jobs Waiting Game: When Will Businesses Hire?

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The Jobs Waiting Game: When Will Businesses Hire?

Economy

The Jobs Waiting Game: When Will Businesses Hire?

The Jobs Waiting Game: When Will Businesses Hire?

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  • <iframe src="https://www.npr.org/player/embed/129001500/129021207" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript

STEVE INSKEEP, host:

It's MORNING EDITION from NPR News. Im Steve Inskeep. Good morning.

New unemployment figures come out today. They are likely to show the economy is still struggling to create jobs. In fact, analysts believe businesses may have created fewer jobs than they eliminated in July. As of last month, the jobless rate stood at nine and a half percent, which amounts to almost 15 million Americans looking for work who can't find it.

The picture is not so bad everywhere and in a moment we'll visit a state where unemployment is about half the national average.

We begin with NPR's Yuki Noguchi.

YUKI NOGUCHI: Weather-wise, July was hot, humid and sluggish, and economists expect the month's numbers to reflect a similar stagnant quality. The stimulus has not spurred businesses to hire as robustly as hoped. State and local governments are cutting back, and analysts expect the loss of temporary census jobs to once again translate to a net loss of jobs.

Nigel Gault is chief U.S. economist for IHS Global Insight. He says businesses are proving very reluctant to hire, because demand for goods remains low and the economy is still shaky.

Mr. NIGEL GAULT (Chief U.S. Economist, IHS Global Insight): We're still moving forward, we're still creating jobs in the private sector, but not at a very rapid pace.

NOGUCHI: The problem is that hopes for a recovery depend largely on when jobs come back. Without jobs, people can't spend. Without spending, businesses don't hire. And that cycle, isn't yet broken.

Earlier in the year, Gault predicted private sector hiring would have accelerated by now. But the economy hit a snag, and now he expects it might be a few more months before businesses hire more than 100,000 people a month.

Mr. GAULT: The further we get into the year, the better the numbers should get on the private side.

NOGUCHI: Gault says companies have gotten by doing more with fewer workers. But there's a limit to those productivity gains, and in coming months, businesses will have to bring in new talent if they want to grow.

In anticipation of today's jobs report, policymakers have also been sounding warnings that this state of jobless stagnation could take some time to resolve.

President Obama told the CBS'S "Early Show" this week, that the extraordinary depth of the recession created a huge deficit of jobs, and that the country is only about halfway through its ordeal.

President BARACK OBAMA: People have every right to be scared, to be angry, to be frustrated. And I took this job because I was convinced that I could solve these problems, not just short term, but long term.

NOGUCHI: President Obama added, one of the economy's most intractable problems has been the large number of long-term unemployed people, which stood at seven million in June.

Treasury Secretary Timothy Geithner also weighed in on the jobless problem this week. He told ABC's "Good Morning America" the unemployment rate would likely rise before it fell again. He said once the economy starts to show improvement, more people start looking for work, which actually will push the jobless rate higher, at least in the short term.

Secretary TIMOTHY GEITHNER (Treasury Department): What we expect to see, and I think most private forecasters expect this, is an economy that's gradually healing. Of course, we want to do what we can to reinforce that process, 'cause it's not coming back as quickly as we'd like.

NOGUCHI: The Obama administration favors a sunset on the Bush tax cuts for the wealthiest Americans, as well as a small business loan bill the administration says will stimulate hiring.

But so far, both proposals have run into resistance from Republicans who argue expanding programs will worsen the deficit, while letting the Bush tax cuts expire could hobble an already fragile recovery.

Yuki Noguchi, NPR News, Washington.

People hoping for a dramatic improvement in the nation's stagnant jobs picture are unlikely to find much good news in Friday's monthly jobs report.