More good news on jobs, productivity; analysis of changing jobs picture
CNN reports: “Jobless claims plunge to lowest since Jan. 2001″
“Jobless claims plunged in the United States last week to their lowest level since January 2001, the government said Thursday, as the labor market continued its recovery from a long slump.”
348,000 new claims for unemployment benefits in week ended Nov. 1, compared with revised 391,000 prior week. Lowest since 339,000 week of Jan. 20, 2001.
Four-week moving average of new claims was 380,000 in week ended Nov. 1, compared with revised 390,000 prior week.
More good economic news, not so clearly good for jobs outlook in near term:
CNN (Reuters)reports: “Productivity gains hit 10-year high.”
“The productivity of U.S. businesses soared in the third quarter as firms managed to raise output at a pace not seen in over 10 years, with only a small increase in the number of hours workers put in on the job.”
“Non-farm business productivity climbed at an 8.1 percent annual rate in the third quarter, accelerating from an upwardly revised 7.0 percent gain in the prior three months.”
“The sharp rise in productivity helped business keep a lid on the costs of production. Unit labor costs, a gauge of potential wage pressures, fell at a 4.6 percent pace, suggesting a good quarterly corporate profit performance.”
“Economists say that over time, strong productivity growth will raise standards of living. But they say in the short-run it could prove a hurdle to job creation, a key element for a sustainable expansion.”
Finally, here is an interesting analysis from CNN:
“Many manufacturers have taken to blaming overseas competitors (particularly China) for stealing U.S. jobs. Technology professionals grouse about how outsourcing abroad (India) is taking away jobs in this country. Others point to increased productivity at home — companies’ better use of technology means they can do more with less.”
“Meanwhile, an oft-cited New York Federal Reserve paper has pointed out that many industries appear to be seeing permanent job losses. These are structural changes, and cry though we may about what may have wrought them, they’re unlikely to get undone.”
“The structural displacement of workers is hardly a new phenomenon in the United States, and many give credit to the speed with which the country reallocates labor for its economic success over the past 20 years. The 1.9 million jobs lost by manufacturers in the 1980s, for instance, were more than made up for by the 20.4 million jobs created elsewhere.”
Some key trends/explanations for what is going on:
“Maybe the shift has already begun. Even as the overall job picture has deteriorated, the ranks of the self-employed have swollen — since February of last year 1.1 million more people are working for themselves rather than kowtowing to the Man.”
“Spiraling benefits costs may mean the trend toward hiring workers on a contract basis may continue.”
“Another possibility is that small companies take up more of the economy’s pie. Just as the proliferation of technology has made it easier for people to work from home and for companies to take on contract workers (many of whom don’t even work from the United States), it has taken away many of the economies of scale inherent in larger companies.”
“In many industries, maybe big companies are on their way to becoming anachronisms.”
Last conclusion probably overstated. But these points may help explain seeming contradiction of continuing mass layoffs from big name companies, accompanied by increasingly rosy unemployment stats.
