Job losses could peak early 2010
TEXT OF INTERVIEW
Renita Jablonski: The nation’s unemployment rate is the highest it’s been since late 1983. The Labor Department report just came out a few minutes ago. Standard and Poor’s economist Beth Ann Bovino was standing by. Beth Ann, 663,000 jobs eliminated last month. How does that compare with what you were expecting?
Beth Ann Bovino: It’s a little stronger — a little weaker I should say — than I had, we had expected. We were expecting about a 650,000 jobs lost. Also, the unemployment rate was a little stronger as well — that unemployment came up to about 8.5 percent. We were expecting just under that, we were expecting about 8.4 [percent]. So I guess the good news is that it wasn’t close to what the ADP private payrolls had shown, which was over 700,000. I’m sure there was a spooked concerns that that that could show up, so. And again, it was a little stronger than we’d expected, a little worse than we had expected, but still not over the 700 mark.
Jablonski: There seems to be a sentiment out there that things can’t get worse for much longer. Is that a safe assumption?
Bovino: What we see with all the numbers that are coming out is that while we’re still in a recession — we think it’s going to last through, we’re looking at probably through the third quarter of 2009 — it does look like the rate is slowing down, meaning that the severity of the recession seems to be reducing its strength. That’s a good sign. We do think that job, you know, job losses are going to continue through early 2010. We’re expecting, we’re now expecting close to a 10 percent rate for unemployment.
Jablonski: And when do you think we’ll hit that point?
Bovino: Unemployment is a lagging indicator, so while the growth in the economy will start to pick up we expect in the fourth quarter, when — helped to, with a little bit of help from the stimulus packages being offered — jobs are going still continue to lose, are going to still continue to contract, actually through we’re saying through early 2010, probably in the second quarter is really we think jobs are going to peak, job losses are going to peak. I think the overall sentiment seems to be that the economy is looking, again, not as bad as what had been expected.
Jablonski: Well we can take that for a Friday.
Bovino: Hahaha, yeah.
Jablonski: Standard & Poor’s economist Beth Ann Bovino. Thanks so much.
Bovino: Thank you.
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