JOB"LOSS" RECOVERY

since the recession ended in march 2002 the labor force has declined by nearly 1.5 million jobs. in fact, in the past 3 months, during what has been unambiguously described as an economic recovery, approximately 400,000 of those jobs were lost. economists and wall street strategists have made it perfectly clear that there is nothing wrong with continued job losses, as the job market is a 'lagging' indicator and will pick up well after the recovery is underway. yet some do say a stabilizing job market would make them feel much more confident in the recovery.

in most of the commentary about the recovery and the continued problems in the jobs data, the optimists use the term "jobless" recovery, which implies that the recovery is underway, yet no jobs are being created. as noted in the title of this piece, i think a better description of the recovery would be a "jobloss" recovery. as the term implies, this recovery, if it indeed a recovery, is not only not creating jobs but is being fostered and supported by a REDUCTION in jobs. in fact, while jobs continue to be eliminated by corporations, thousands of the discouraged unemployed are leaving the search altogether as they cant find jobs, even after 2 extensions of government unemployment benefits. those benefits are about to end and the employment difficulties seem far from over.

if in fact the recovery is underway, then jobs MUST start to be created in order for the economy to stay in the recovering mode. most agree that the recovery has been bouyed by low interest rates, 2 historically large federal tax cuts, huge government spending, enormous corporate restructurings and write-offs (the famed 1 time charges that have been many more than 1 time), continued cost cutting and all sorts of other "propping policies". all of those efforts will certainly help corporations fix there business models, but none will assist the unemployed find jobs. job creation needs to follow or else another leg down will be made as consumers will not be able to stay with the economic recovery program.

no economic recovery has seen this type of employment market and been able to sustain itself. companies continue to cut costs and jobs in order to align costs and production with demand. as with the historic downturn and the 'new' enviroment we live in, i am sure this time will be different. how it will be different is yet to be seen. my best guess is that it will be different in a very negative way.

have a great day!

larry