Will jobs numbers follow GDP to show slower economy?
The Department of Labor reports monthly job numbers for January on Friday morning. The report might provide guidance as to whether economic growth has really slowed to a crawl, or whether recently-reported figures showing a decline in Gross Domestic Product in the fourth quarter was an anomalous blip that will be corrected in later revisions.
Economists are predicting the economy added 155,000 jobs in January — about the same as December — and that unemployment stayed at 7.8 percent.
An optimistic view going forward comes from Bernie Baumohl of the Economic Outlook Group. He thinks the economy will continue improving throughout 2013.
“I think companies are going to be more likely to ramp up hiring,” says Baumohl, “because of growing confidence that there’s a lot of pent-up demand that’s going to be realized.” Baumohl also believes the international economic situation is now improving — in Europe, Asia, and Latin America.
Baumohl expects the U.S. labor market to show job gains this year in construction, retail, bars, and restaurants, as well as mining and energy — all the economic boats that finally start to float when people feel like they’ve got extra discretionary spending money.
A more pessimistic view comes from Christine Owens of the National Employment Law Project. She points out that it could be years before millions of long-term unemployed thrown out of work during the recession find new jobs.
“As job growth starts to pick up, we’re going to see a lot more people come back into the labor force,” says Owens, who points out that labor-force participation declined during and after the recession as discouraged workers dropped out of the job-hunt. In the short term, she predicts an increase in the unemployment rate as job-seekers flood back in. “And that will also create a lot more competition for the jobs that are being created,” she says.
Owens predicts young, unskilled workers, and older displaced workers, will find themselves at a disadvantage under these conditions.
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