Lost jobs will not return until 2012 - economist poll

[Emily]

http://www.marketwatch.com/story/lost-jobs-wont-return-until-2012-economist-poll-2009-10-12
By Greg Robb, MarketWatch

WASHINGTON (MarketWatch) -- "The 7.2 million jobs lost in the recession won't return until 2012 or beyond, according to a new survey of top business economists released Monday.

Economists surveyed by the National Association for Business Economics said any recovery is likely to be so gradual that these jobs won't return to the labor market for three years.

Less than 8% of the 44 economists surveyed expect to regain the lost jobs before 2012. About 54% expect to see the loss fully reversed by 2012. At the same time, 33% project it will take until 2013 to recover the lost jobs. Five percent say it will take even longer.

Real GDP is expected to advance at a 2.9% pace over the second half of this year and at a moderate 3% pace next year, the survey concluded.

The NABE panel forecast the unemployment rate to rise to 10% in the first quarter of next year and only slip to 9.5% by the end of 2010.

The economists think the Federal Reserve will keep interest rates at record low levels until late next spring, and then will push rates up to 1.0% by the end of the year.

Inflation will remain low, the economists said. Substantial labor market slack will keep wages from rising.

The core index of personal consumption expenditures, the Fed's preferred measure of inflation, to forecast to tick up to 1.5% in 2010 from the 1.4% rate expected this year.

The forecasters think it will take some time for financial markets to return to normal. Almost a third of the panel members believe this will not occur until some time between 2011 and 2013.

The housing market will gather momentum next year and contribute to overall growth for the first year since 2005. House prices are slated for a modest 2% gain in 2010.

Consumer spending is expected to remain sluggish given the lagged effects of past wealth loss and a weak labor market. The savings rate is not expected to rise sharply however and will average only 3-5% through 2012."

http://www.marketwatch.com/story/feds-bullard-warns-on-inflation-unemployment-2009-10-11
By MarketWatch

LOS ANGELES (MarketWatch) --" Federal Reserve Bank of St. Louis President James Bullard said Sunday that unemployment is headed into double digits, while the medium-term inflation outlook poses more risk than generally believed, according to reported comments.

"Unemployment is leveling off, but we still may be headed toward double digits," Bullard was quoted as saying in a Bloomberg report.

According to data released earlier this month, the U.S. unemployment rate hit a 26-year high of 9.8% in September. See full story on September jobs report.

Bullard also voiced concern that popular perceptions ignore the risk of high inflation.

"I am concerned about a popular narrative in use today ... that the output gap must be large since the recession is so severe ... [and] any medium-term inflation threat is negligible, even in the face of extraordinarily accommodative monetary policy. I think this narrative overplays the output-gap story," he was quoted as saying by Dow Jones Newswires.

Bullard -- currently a non-voting member of the Federal Open Market Committee but set to have a vote on the policy committee next year -- made the remarks at an annual meeting of the National Association of Business Economics.

Bullard also said expectations for economic growth of 2.5% to 3% in the second half of this year are "reasonable.""

(I think we are already in the double digits.)
http://www.shadowstats.com

 

[AlaskaDenise]

Re: Lost jobs will not return until 2012 - economist poll

How can they be sure we're not building an economy that has a lower labor requirement......permanently?

As production of almost everything shifts abroad and resale/service businesses reach a market saturation point, maybe there is little need for a rapidly increasing labor force.

.

 

[Emily]

Re: Lost jobs will not return until 2012 - economist poll

How can they be sure we're not building an economy that has a lower labor requirement......permanently?

I'm not sure what it will take to turn it around, but sectors of the employment market here in the US don't show signs of recovery at all.

 

[Commonground]

Re: Lost jobs will not return until 2012 - economist poll

How can they be sure we're not building an economy that has a lower labor requirement......permanently?

They had better get some incentives to bring manufacturer's back to the United States then. Permanent lower labor requirement is not going to work. ....Unemployment benefits are not nearly enough to live on for extended periods of time.

Senate Vote to Extend Unemployment Benefits Possible Next Week

Oct. 9 (Bloomberg) -- The U.S. Senate may vote as soon as next week to extend unemployment benefits after Democratic lawmakers resolved a dispute over how to distribute benefits across states with varying jobless rates.
Senate Majority Leader Harry Reid, a Nevada Democrat, announced a compromise plan yesterday that would extend aid to all states for at least 14 weeks. The hardest-hit states, with unemployment rates topping 8.5 percent, would get a 20-week extension.
?This agreement recognizes the need to extend unemployment benefits for workers in every state,? Reid said in a statement. ?Our compromise recognizes that workers in the hardest-hit states have even greater challenges finding work and are in the greatest need of assistance.?
Reid said he wants the vote on the measure to occur next week.
The plan would distribute benefits more widely than legislation approved last month by the House that focused only on those states with the nation?s worst unemployment. The House Bill would extend benefits for 13 weeks in states with jobless rates of at least 8.5 percent.
Democrats had said they hoped to forward the House measure to President Barack Obama before 400,000 Americans exhausted benefits at the end of September. The plan ran into opposition, though, from 17 senators whose states would have been excluded.
September?s Figure
The national unemployment rate in September was 9.8 percent, the highest since 1983, according to the Labor Department. Also, long-term joblessness hit the highest level last month in at least a half-century, according to the Labor Department. The share of the unemployed who were out of work for at least six months reached 35.6 percent in September, the most since the agency began keeping statistics in 1948.
More than 5.4 million people have been unemployed for at least 27 weeks, the agency said.
About 1.3 million people will exhaust their benefits by the end of this year, according to the National Employment Law Project.
?Unemployed workers use these benefits to buy essentials and pay the bills; extending unemployment benefits is one of the most effective actions we can take to stimulate the economy,? said Senator Jeanne Shaheen, a New Hampshire Democrat.
Senator Jon Kyl of Arizona, the chamber?s No. 2 Republican, blocked the agreed-upon plan from coming up for a vote yesterday because he said his colleagues didn?t have enough time to study it.
?I have no doubt that at the appropriate time we?ll be able to work out some kind of agreement,? said Kyl. ?But our side is going to need some time to look at it.?
Lawmakers are considering other actions amid the widening job losses.
House Speaker Nancy Pelosi, a California Democrat, said Democrats may extend a $8,000 tax credit for first-time homebuyers that expires Dec. 1. She said lawmakers also are debating whether to expand tax breaks for companies.
To contact the reporter on this story: Brian Faler in Washington at bfaler@bloomberg.net.
Last Updated: October 9, 2009 00:36 EDT

http://www.bloomberg.com/apps/news?pid=20601087&sid=aYf6i4op8n6s

 

[AlaskaDenise]

Re: Lost jobs will not return until 2012 - economist poll

I'm not sure what it will take to turn it around, but sectors of the employment market here in the US don't show signs of recovery at all.

That's my fear.

Part of the solution is up to every person - "support your own economy." We need to keep our dollars circulating in our own economies. I'm tired of hearing people complain about the higher price of goods produced locally. When they send their dollars elsewhere, they end up being taxed to support deficiencies in their own economy. They're actually paying double for those goods - once to the cheap labor producer and then again to subsidize the unemployed & public services costs in their own economy.

.

 

[Laidback Al]

Re: Lost jobs will not return until 2012 - economist poll

How can they be sure we're not building an economy that has a lower labor requirement......permanently?

As production of almost everything shifts abroad and resale/service businesses reach a market saturation point, maybe there is little need for a rapidly increasing labor force.

.

Indeed. We could be looking at a long term, gradual decline in our standard of living.

US growth has been fueled almost exclusively by consumerism, not exportation. Consumers need money to buy things, they also need jobs to earn money. Although these economists suggest it, I don't see how there can be a "jobless" financial recovery. Who is going to be doing the buying when one out of every ten workers is out of a job. When consumer demand for goods falls (as it has), there is no need to ramp up production of more goods (either in the USA or elsewhere). Besides the economists wishing and hoping for a rosy future in this poll, there is no current fundamental economic data to suggests that there will be future growth in the job market to absorb up to the 15 million currently unemployed workers.

 

[prepdeb]

Re: Lost jobs will not return until 2012 - economist poll

So many large US companies have moved much of their technical work offshore over the past decade.
Much simpler than moving manufacturing to another country.
With the ability to work remotely, the jobs can be performed from nearly anywhere.

Many of the companies who maintain manufacturing facilities here have moved to employing more undocumented workers.

Most of the people here who do trade work are recent immigrants.
Oklahoma is a right to work state so unions are few and weak.

I don't think it'll be quick or easy to reverse trends that have developed over several years.
The jobs still exist, but not for most of the people seeking them.

What will it take?
Incentives or regulation?
I don't know.

 

[AlaskaDenise]

Re: Lost jobs will not return until 2012 - economist poll

....there is no current fundamental economic data to suggests that there will be future growth in the job market to absorb up to the 15 million currently unemployed workers.

Yes, this yellow brick road is taking the US and perhaps other countries to a society that may resemble the dark ages, with wealthy landholders and serfs.
But today, the serfs are less likely to accept their situation as fate.

Those wall street tycoons should read their history books to learn how it all turns out....then remember that today those same processes can happen with the speed of an internet communication.

.