Jobs Outlook: Why GDP Gains Haven't Helped
This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.
Third quarter Gross Domestic Product showed that the nation's economy grew by an annualized 3.5% rate. Not bad, especially considering that we've seen contraction in five of the last six quarters. Most economists believe that the most severe economic decline since the Great Depression likely ended in August or September. Of course we'll have to wait until the folks at the National Bureau of Economic Research's Dating Committee declare the actual end date. Still, it's clear that much of the data is improving. "Tell that to my brother-in-law who just lost his job last week," said one Early Show employee.
In our interview this morning, Harry Smith and I discussed the good, the bad and the ugly of the economy. Not surprisingly, a lot depends on which sector of the economy employs you and where you live.
Your job situation is the most significant factor in determining how you feel about the economy. Earlier this week, the Conference Board's October Consumer Confidence index dropped unexpectedly - respondents cited the most anxiety about jobs. But the effects of this recession haven't been spread equally across the economy or the nation. Here's a quick reference guide to gauge who's feeling the most pain.
According to the National Association for Business Economics, the percentage of firms adding jobs doubled from an all-time low of 6% in July to 12% in Oct. Those expecting to add employees over the coming six months exceeded the number expecting job cuts for the first time since the recession began.
Sectors expected to show job growth:
•Health Care: 559,000 jobs added since the beginning of the recession in December, 2007
•Education: States have reported using stimulus money to create or save 388,000 jobs this year. There's been controversy about the overstatement of stimulus jobs, which could be clarified tomorrow, when with the administration's report on the status of stimulus money will be released.
•Government: Uncle Sam can be tricky - sometimes he's a seasonal employer, like when extra bodies are needed for the census. Still, it's expected that government employment will increase over the next year as additional stimulus dollars are spent.
•Technology: Tech companies recovered more quickly because they didn't use debt in the expansion. Now, with cash on hand, they can hire more aggressively.
Sectors still in a funk, although improving from earlier in the year:
•Construction: Job losses averaged 66K/mo from May to Sept - 1.5 million jobs lost since 12/2007
•Manufacturing: Job losses averaged 53K/mo last three months - 2.1 million during recession
•Retail: Temp hiring for holidays could help offset 39K lost in September - depends on consumers
States that have fared best: 27 states have unemployment rates lower than the 9.8% national rate. Those that have done best are those which didn't experience much of boom and avoided the brunt of the bust. Also, those places where the economy rests on smaller, more diversified businesses have done better.
•North Dakota= 4.2%
•South Dakota= 4.8%
*#8226;Nebraska= 4.9%
States that have been hit hardest: the usual suspects here...
•Michigan= 15.3%
•Nevada= 13.3%
•Rhode Island= 13%
•California= 12.2%
Sure, we're happy that the economy expanded last quarter and yeah, we know that confidence and employment are lagging indicators, but that doesn't really help the unemployed construction worker from Detroit, does it?
More on MoneyWatch:
•Unemployment at 21%? It's Looking That Way
•Should You Ever Work for Free?
•Boo! 5 Nightmare Scenarios for the Economy
•Market Guru: Stocks Are Set to Fall
•Dumbest 401(k) Mistakes to Avoid
•Home Prices Rise in 15 Big Cities
