Mixed Messages?
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If we’re to believe what’s coming out of Washington, national unemployment rates will remain above 9% through 2012, despite predictions of a 4% growth of the economy in both 2011 and 2012. Deciphering the many numbers from various governmental agencies is difficult, at best and these latest figures only highlight discrepancies and even what some say are contradictions. Still, says A. Harrison Barnes, career coach and EmploymentCrossing.com founder, these numbers from the White House are much more optimistic than other forecasts from economists. The White House is relying on “rapid growth” in business investments and a strong emphasis on exports. A White House spokesperson says the numbers are “completely reasonable”.
So what makes the Obama Administration so sure? The EmploymentCrossing.com founder says the more assertive numbers are based on the imminent expirations of tax cuts put in place by former President George W. Bush’s administration.
The Federal Reserve predicts unemployment will fall between 8.3% and 8.7% in 2011. It could be the White House is closer than what the Fed predicts, especially if one considers the reports released in June and early July, says A. Harrison Barnes. Retail sales are down and hiring isn’t as brisk as many had hoped by now. In fact, the economy lost jobs in June. The Labor Department said a net loss of 125,000 jobs in June was mostly due to the quarter million census jobs that ended.
So does all this data point towards a double dip recession? Not surprisingly, opinions run the gamut. Some are already predicting the second half of 2010 will yield even more disappointing changes. “It’s like a vicious cycle”, says Barnes. “Businesses are pausing their efforts of adding to their payrolls because of concerns of a potential double dip recession, yet the economy can’t grow until businesses begin hiring again”.
To put it in perspective, 2008 and 2009 collectively lost more than 8.5 million jobs. By June, 2010, there have only been 593,000 new jobs added to American businesses. Par for the course, Democrats are blaming Republicans and Republicans are blaming the Democrats. In the meantime, some sectors, such as the construction sector, continue to cut even more jobs. July is expected to bring even more bad news as nearly 400,000 of the remaining census workers will find themselves unemployed.
The key could be in temp jobs. More employers are committing to filling positions with employees that are temporary in nature in an effort to ensure they’re choosing the right candidates. This trend, while not necessarily new, has seen a recent surge. The good news is once employers are confident in their temp’s capabilities, they’re offering full time permanent positions.
For now, all eyes are on the national unemployment rate, which is still hovering around 9.6%. Unfortunately, the recent drops are being credited to those who have become discouraged in their job searches and who have given up. They are no longer receiving unemployment benefits and so they don’t have to prove to anyone they’re actively looking.
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