When all you read is gloom, turn here for a much different perspective.

Saturday, February 6, 2010

Net Jobs Growth Begins - Substantial Additions By Spring

You may recall our optimistic prediction in November that the positive trending in the labor market pointed to net jobs growth by Christmas. Revised government numbers on Friday bolstered that assertion. 

Further it is now clear that for job seekers in 2010, the economy will likely be their friend. With a 5.7% GDP growth in the fourth quarter of 2009, following the 2.2% increase in the third quarter, this recovery is already stronger than the last two.
Furthermore, (as our updated chart illustrates) the U.S. labor market is on the cusp of substantial, sustained positive job growth. And this net jobs creation is coming only two quarters after the end of our deep recession. That's just one-third of the 21 months it took for job growth to resume after the 2001 recession. A jobless recovery? Not this time.  As our chart suggests, given current trending, the U.S economy will likely add more than 100,000 jobs in February.  And the picture looks even better come springtime.

The government's monthly job report on Friday showed that the disastrous labor situation that plagued the nation's economy going into 2009 is now on the mend. The unemployment rate has peaked and now fallen in January to 9.7%.

Perhaps the most encouraging sign from the current report was the addition of 52,000 temporary workers. Temporary worker hiring often signals that employers are starting to gear up again.

Additionally -- the report shows -- employers brought many "reduced hour" workers back to full-time work status in January. That concrete move is frequently seen as a precursor to hiring additional workers as recovery takes root.

Even cautious economists like Mark Vitner of Wells Fargo remarked on Friday that despite his opinion that the January falling unemployment rate "showed an exaggerated sense of improvement in labor market," he continued, "But there is improvement. I don't want to take that away."


  1. Companies typically hire 1 quarter after 2 quarters of positive GDP growth. Since we have had 2 quarters of positive GDP growth, 3rd and 4th quarters of last year, hiring should increase this quarter of 2010. Course, I was telling someone this in May 2009 (also stating the recession should be officially over based on the massive amounts of data I analyzed mostly from this site). Hopefully, the economy doesn't make a liar out of me.

  2. Anonymous,

    Thanks for reading and spreading the good news. Indeed sometimes the economy can be unpredictable, but most of the time - if you follow the trends - and not the headline of the day, you'll end up being right on the mark.

    Good luck,

  3. If you read Jim Jubak and then turn here, you read two different things. Same data, two sets of views. I especially believe we have to be positive no matter what, regarding most things in life, including the jobs hope for the future. That hopefulness can spur things on. Thank you for being "good news." Jubac knows negative will get attention and that is what media in general believes. News, sports weather etc is always negative to be newsworthy. What if we had a news network that like this one only had good news, or showed it in a more positive light? When I read or hear the news, I think, ok, what is the Good Economist and its readers going to say?

  4. Anonymous,

    Thanks... indeed most media by their own admission will admit that bad news is the only news that is newsworthy to them... indeed it is what "sells" best. It is why this blog was born... to in some small way offset what is primarily a steady stream of bad news on most other media outlets...

    Thanks for reading and commenting!

  5. Again, the NYT's front page 2/21/10 is most depressing. Again, it is selling newspapers. This same data could be turned around. This huge newspaper will depress millions as they sip their morning coffee. Why can't they report some good news? And even if this news is true, its not the only news. There are jobs. There are people hiring. This take on bad news is really the culprit,far more than the bad news itself. I really appreciate this site. Thank you.


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