From Time.com
By Bill Saporito
Kent Niederhofer can't find enough mechanical engineers to work for him — in southeastern Michigan. You know, where Detroit is, with its 13.3% unemployment rate. Niederhofer is president of the American branch of Ricardo, an engineering consultancy that designs the power trains of some of the coolest stuff around: Bugatti sports cars, huge wind turbines and unmanned aerial vehicles. "We are doing rocket science every day," says Niederhofer. "It's just not on rockets." So Ricardo got a little desperate, renting a billboard to place a help-wanted ad that featured a picture of a sexy-looking sports car, the tagline "Why you became an engineer" and a Web address for job seekers. He calls it engineer porn.
A Turning Point, Maybe
Flexible, outwardly focused companies such as Ricardo, GE and Deloitte are the main force behind an optimistic and underplayed fact: last September, the U.S. economy finally stopped bleeding jobs. And now job creation may be at a crucial turning point. The ADP National Employment Report recorded a surprising 297,000-job jump in private-sector employment in December. Manufacturing activity is up, retail sales are strong, and overall GDP growth is on track to be a healthy 3% this year. Inflation is still muted, and stocks are on a roll. It all bodes well for the Obama Administration's efforts to mitigate the 9%-to-10% unemployment rate that has hung for 19 months like a deadweight around the neck of the economy, not to mention the national psyche.
The Great Recession didn't merely cause cyclical job losses. It created an unemployment chasm. More jobs were lost in the 2007-09 recession, which officially ended in June 2009, than in the previous four recessions combined, says Nariman Behravesh, chief economist for IHS Global Insight. "It's a very deep hole that we are climbing out of. We lost something close to 8 million jobs. That's why it's going to take a long time — 2015 — to get to [an unemployment rate of] 6%." Indeed, the rate could even rise again, as people who left the labor pool — and thus don't count as unemployed — start to look for work again.
That 6% figure refers to what economists call full employment, meaning that people who want to work can find it (give or take time lost to layoffs or telling the boss to shove it). Knocking any kind of dent in the current jobless rate is going to require the net addition of at least 135,000 jobs month after month.
That's not happening — yet. But economists are revising their GDP growth projections upward, and if the conventional wisdom holds, that has to result in stronger job creation at some point quite soon. (Employment growth tends to follow GDP growth with a lag.) Companies are already sitting on mountains of cash because they increased productivity through layoffs and other efficiencies. They have the money to hire, but they need to see increasing sales to justify it. There's some evidence that consumers are finally opening their wallets. Christmas sales were strong. Given the stimulus coursing through the economy from the Federal Reserve's quantitative easing, the tax-cut extension and a 2-percentage-point reduction in the payroll tax, the retail therapy should continue into the new year.
Read more: http://www.time.com/time/business/article/0,8599,2040964-1,00.html
WASHINGTON (MarketWatch) — The U.S. economy added 103,000 jobs in the final month of 2010 while the nation’s unemployment rate fell to 9.4%, the lowest level since May 2009, the Labor Department reported Friday.
Payrolls for November and October were also revised higher by 70,000 jobs, the government said. Read the full report.
The December gain in jobs, however, fell short of expectations. Economists surveyed by MarketWatch had predicted a net 175,000 increase, with many raising their forecasts earlier this week after another key report indicated a pickup in hiring. See MarketWatch calendar of key economic indicators.
The slow U.S. recovery since the end of the recession in mid-2009 is partly the result of high unemployment, which depresses consumer spending, the single largest source of the nation’s economic growth. Increased hiring by businesses more confident in a U.S. recovery is seen as the key to nursing the economy back to good health.
The unemployment rate, meanwhile, dropped to 9.4% in December from 9.8% in November, according to a separate survey of 60,000 households. It’s the biggest one-month decline since April 1998.
In December, the ranks of unemployed fell to 14.5 million from 15 million, while the number of employed people increased by 300,000 to 139 million. Economists had been expecting the unemployment rate to remain flat. The jobless rate spiked to as high as 10.1% in October 2009, compared to under 5% before the 2007-2009 recession began.
The latest increase in job growth is one of many signs that the U.S. economy is gradually emerging from its malaise following the official end of the recession in the summer of 2009.
Earlier this week, for example, the giant payroll-processing firm ADP reported a surprisingly large 297,000 gain in private-sector employment last month. ADP data and the government’s payroll report track each other very closely over time, though some months can show large gaps between the two. That appeared to be the case in December.
Read more here.
WASHINGTON (MarketWatch) -- Private-sector employment gained 297,000 in December, according to Automatic Data Processing Inc.'s employment report released Wednesday. Employment in the service-producing sector rose 270,000, the largest monthly increase on record. Employment in the goods-producing sector rose 27,000, the largest gain since February of 2006. On Friday, the government will report on December's nonfarm payrolls, which also include government workers, and economists polled by MarketWatch are looking for a gain of 143,000, and for the unemployment rate to remain at 9.8%.
