Employers slow to hire amid hope of recovery

[Better Believe It]

Employers slow to hire amid hope of recovery
Reticence is why many economists see high unemployment continuing
Associated Press
August 11, 2009

WASHINGTON - U.S. employers who have cut jobs over the past year are in no hurry to start hiring again just because the recession is tapering off.

Because labor is the biggest expense for most companies, that kind of caution is typical at the end of recessions. After the last one, in 2001, unemployment kept rising and didn't peak until June 2003 — 19 months into the economic recovery.

This time around, some economists say unemployment may not return to healthy levels until 2013. Companies have been slashing workers' hours, squeezing more work out of the employees who are left and relying on cheaper temporary staffers to fill the gaps.

Employers wiped out 247,000 jobs in July, far fewer than any other month this year. The economy shrank in the second quarter at a much slower pace. And businesses are seeing real results of a warming economy. But that doesn't translate into job creation.

Hiring should start again late next year, said Sophia Koropeckyj, managing director for Moody's Economy.com. It's got a long way to go: The recession has eliminated 6.7 million jobs, and 14.5 million workers are unemployed and unable to find work.

Now that economy is beginning to recover, some companies will find there are cheaper alternatives to bringing in new full-time workers. For example, they can increase the hours worked by the employees they already have. Right now, the average workweek is 33.1 hours, near a record low.

More significantly, businesses in this recession have managed to produce just as much with fewer workers. From April through June, productivity surged by the largest amount in nearly six years, the government said Tuesday.

When business are producing as much or more with fewer people, that makes the job market even more dismal for the unemployed.

http://www.msnbc.msn.com/id/32378500/ns/business-stocks_and_economy

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Recession's job losses may take years to recoup
Economy may be stuck with high unemployment, weak growth for years
By John W. Schoen
Senior producer
msnbc.com
August 7, 2009

Friday's monthly jobs report — showing a slower pace of layoffs in July — adds to growing optimism about signs of life in the economy. But this recovery, when it comes, won’t feel like any in memory.

The reason is that consumers — the mainspring of the economy — remain hunkered down. Growth is still coming from cost-cutting and federal spending, not from a pickup in real demand. And with 7 million workers sidelined by this recession — bringing the total number of jobless to nearly 15 million — that headwind likely will be blowing for several years.

“We're not going to go back to where we've come from," said Mohamed El-Erian, CEO of PIMCO, a global investment management firm. "There's still an assumption out there in the marketplace that somehow this was a very nasty cyclical fall, and we're going to go back to where we've come from. That's not what’s going to happen.”

The story continues at:

http://www.msnbc.msn.com/id/32314827/ns/business-eye_on_the_economy/

[TexasObserver]

1. I think it will be Thanksgiving before we really gain jobs.

I'm hoping the Christmas and end of year buying carry over to 2010, and we see some job gains in early 2010.

I truly believe we'll be in better shape in January than now, and better shape by next August than January. I'm optimistic we've made a turn, even though it won't help many for 6 months to a year.

[spanone]

2. good news. there is now 'hope' for recovery