If I hear one more report about a jobless economic recovery I think my head will explode. There is not real economic recovery without job creation. Talking about a “jobless recovery” is a classic spin that politicians from both parties use when the economy gets stuck in a long-term slump.
The latest from William Dunkelberg, chief economist for the National Federation of Independent Business, indicates that the slump is, indeed, going to be with us for quite a while:
“Small business owners in August reported a decline in average employment per firm of 0.8 workers (seasonally adjusted) during the last three months. August’s figure was unchanged from July, but a big improvement from the record loss of 1.26 workers posted in May.
“Six percent of the owners increased employment by an average of 2.5 workers per firm while 22 percent reduced employment an average of 3.9 workers per firm (seasonally adjusted). The job generating machine is still in reverse. The BLS recently reported unusually high job losses in the small business sector, due in part to terminations and failures. As can be seen in the chart below, the reduction in labor costs (e.g., jobs) has been huge. This explains the recently announced impressive productivity numbers; if employees are fired faster than sales fall, output (sales) per hour will rise. Hopefully, this job cutting has been overdone and will produce a faster than expected recovery in employment (once consumers start spending – retailers and restaurants are in tough shape). Manufacturing is improving, but that will not budge the employment numbers.”
“Eight percent (seasonally adjusted) of small business owners reported unfilled job openings, down 1 point from July. Over the next three months, 13 percent plan to reduce employment (down 1 point), and 7 percent plan to create new jobs (down 1 point), yielding a seasonally adjusted net 0 percent of owners planning to create new jobs, a 3 point improvement over July. Not seasonally adjusted, net job creation plans were negative in all industry groups except the professional services and the wholesale trades.”