The jobs picture still looks sour, but there could be light at the end of the tunnel.
The bad news: The private sector slashed more jobs than expected in August, reversing a sixth-month trend of job gains. The good news: Overall employers announced fewer planned job cuts.
Private sector employers cut 10,000 jobs in August -- a drop from the downwardly revised 37,000 jobs they added the month before, according to a report by payroll processing firm Automatic Data Processing.
Those cuts were worse than predicted. Economists polled by Briefing.com had expected the report to show 13,000 jobs added in August.
While jobs statistics are often a volatile measure, the drop is still enough to "heighten fears about a double-dip recession," Paul Ashworth, senior U.S. economist with Capital Economics said in a note to investors.
Reading this article it makes me very concerned with the current state of the economy but I think about the article I posted dealing with worker productivity. As firms slim down they hit a point where they need human capital (labor) to increase productivity and output. There for for the short term unemployment is high but if demand picks up firms will need to increase output. I hope with the stimulus running the course that money will reenergize the economy to increase overall demand intern businesses will return to hiring and lower unemployment.
ReplyDeleteIt is strange that there have been more cuts in jobs in the last month since another article I read said that consumption levels have increased.
ReplyDeleteLinking this to class, it could be that firms are cutting down on labor, to increase each ones marginal productivity and lower costs.