- US. "It is primarily the weak labor market that is causing Americans to worry and fueling the fear of a double-dip recession. 8½ million people lost their job during the "Great Recession". And a growing population means a further 2½ million entered the labor market (cf. chart below)."
- Vicious circle. "The economic recovery created only a few new jobs, and above all few permanent jobs. Government and temporary-help agencies are responsible for most of the new jobs. And the further weakening of the dynamic in the economy as a whole means that the current development will continue to lag behind earlier labor market cycles for some time to come. This is slowing growth, which in turn is hurting hiring plans."
- Increase. "On top of that, there is the structural change that is making it increasingly difficult for those seeking employment. Jobs in the producing sector are disappearing forever. Job openings will be almost exclusively in the services sector. The prospects for inflexible and poorly-educated applicants are virtually non existent. There is the threat of permanently
higher long-term and core unemployment (pages 2-5)."
- Germany. "The perception is, in contrast, quite different in Germany. Some are even talking about the job miracle. In July, unemployment fell for the 13th consecutive month to the level prior to the Lehman collapse. Even during the crisis, unemployment was with 3¼ mn much lower than had been feared (5 mn) since management and labor agreed on shorter
working hours and the government promoted short-time work massively.
- Forecast. In the short term, the prospects remain favorable. Nevertheless, too many hopes should not be pinned on the creation of new, permanent jobs. In fact, employees will work longer hours again. And companies are focusing more on temporary staff in any case (page 14)."
Unicredit Friday Notes 20100730
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