Monday, November 30, 2009

When Will Job Losses End?

When will the nation begin to add jobs and is the stock market getting ahead of the economy? Since 1950, the U.S. economy has suffered 10 recessions with a median length of 10 months. On average, the nation did not begin adding jobs until 3 months after the end of the downturns. Normally the longer the length of the recession, the shorter the period before the economy begins adding jobs.

Furthermore, the stock market began rising, on average, approximately 4 months before the end of the recession. Thus if history is a guide, the economy will continue to experience stock market gains and the number of jobs should begin to increase in the first quarter of 2010. Unfortunately, the lack of clarity from policy makers is undermining the willingness of businesses to hire new workers and could delay new hiring and puncture stock market gains. The top need of consumers and businesses---public policy certainty. This will cure what ails the economy. Ernie Goss


Raj said...

Fear of job loss increases saving habit which is good for the economy.
Work from home India

Dakotaboy said...

Back in April 2003, I believe there was a Warren Buffett article in Forbes, proposing trade certificates to help balance exports and imports to our national goals. What happened to that proposal? To me, it did away with our pleading to China for a re-balance of their currency. It would be a free market approach to meet our national goals and spur job creation in this country. For example, if oil imports were necessary, importers would likely have to buy less foreign made refrigerators or TVs. Why isn't this getting more play? What happened to this proposal?