‘Light at the end of the tunnel’ for poor job market
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‘Light at the end of the tunnel’ for poor job market
Mitchell Hartman: Central banks in the U.S., Europe, Canada and Japan announced a plan to add dollars into the global banking system. That’s to try and prevent a credit crunch where banks won’t lend to businesses and consumers. And at least in the U.S., consumers might be feeling a bit better, after job numbers out this morning. ADP — which handles payrolls — says private companies added 206,000 jobs in November. On Friday, we’ll find out the unemployment rate from the government’s monthly jobs report.
Paul Ashworth joins us from Capital Economics in Toronto. Good morning, Paul.
Paul Ashworth: Good morning, Mitchell.
Hartman: So, it seems with the numbers we’re seeing this morning that in spite of all the generalized financial crisis swirling about, the U.S. job market actually seems to be growing pretty steadily and robustly at this point?
Ashworth: That’s right — we have seen a bit of resilience over the last few months. It’s still not particularly strong, but it’s a lot better than it was a few months ago. Obviously, there’s still some risks out there — I guess the big danger is that a recession in Europe could eventually lead to some sort of second financial crisis here in America.
Hartman: It you’re in state or local government, you’re probably already feeling like it’s a recession, because a lot of the job losses that we’re seeing now in the U.S. — and the layoffs — are at state and local government. Is the private sector robust enough now to cover that slack?
Ashworth: It’s still struggling to do so, but as far as state and local governments go, there might now be a light at the end of the tunnel. Now that the economy’s growing again, state and local governments are seeing revenues begin to increase. And so, even if we don’t actually see a rise in state and local government employment, at least the rate of contraction should begin to ease off next year at some point.
Hartman: Paul Ashworth at Capital Economics, thanks very much.
Ashworth: You’re welcome.
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