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NYT: Rate of Job Losses Slowed Significantly In May (Smallest Number Since Last September) [View All]

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ClarkUSA Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jun-05-09 10:07 AM
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NYT: Rate of Job Losses Slowed Significantly In May (Smallest Number Since Last September)
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Edited on Fri Jun-05-09 10:46 AM by ClarkUSA
There's a glimmer of good news amidst all the gloom that is the labor market.

The rate of job losses in the United States slowed significantly in May, the government reported Friday, lifting hopes that the countrys plummeting labor market was on its way to stabilizing.

Some 345,000 jobs were lost last month, a stark figure, but one that represented the smallest number of monthly job losses since last September, the Labor Department reported. Economists said the figures showed the governments efforts to prop up the economy were beginning to have an effect... Economists were encouraged that businesses were cutting fewer jobs, but... They warned that job losses were likely to pile up through the rest of the year as the countrys labor market bottomed out... But 18 months into the longest recession since the 1930s, economists said the milder pace of job losses indicated that the economy was gradually leveling off as government stimulus money trickled out and businesses reined in their budgets and payrolls.

Things are still getting worse, but the pace of decline has slowed down, said David Wyss, chief economist at Standard & Poors. Over all, its not quite as dire as it looked in the first quarter.... Construction jobs fell by 59,000 a marked improvement from just a month ago, when there was a net loss of 108,000 jobs in the sector.

But there's a caveat.

Some economists, anticipating an additional two million job losses nationwide, say the job market will be a disaster zone even after the economy starts to heal. After months of sharp economic contraction and falling profits, many employers will be reluctant to expand their work forces to meet the first increases in orders and sales.

Instead of hiring full-time workers, many employers are likely to hire temporary workers as needed, or have their extant employees work overtime. Economists said the length and severity of this recession will make businesses especially leery about re-inflating their payrolls once growth eventually resumes.

Take a look at graphs that show the marked decline in job losses in the last four months: /
Story link:

Keep in mind that unemployment is always a lagging indicator, which means that the unemployment rate will continue to rise through the rest of the year. However, it's heartening to see that there is a clear pattern of decline since January even though Americans face difficult times ahead.

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