Arnold Kling  

Momentum in Employment

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The employment situation report for May 6 shows a gain of 700,000 jobs over the three-month period February through April.

One thing I learned from Ed Leamer's Macroeconomic Patterns and Stories is that there is momentum in employment. If history is a decent guide, then this growth in employment is likely to continue for a least the next month or two (I would be for much longer).

I think a lot of pundits have a stake in making pessimistic statements. The left wants to argue for more stimulus. The right wants to argue that President Obama's economic policies have messed things up. But I think that a purely data-driven, history-driven prognosis would be that job gains will continue.

My prediction for the long-term unemployed would not be so sanguine. The types of jobs that they are suited for are too far removed from the types of jobs that are likely to be created. I think that the demographic group that stands to benefit the most from the recovery is workers in their 20s, who have faced a devastating job market the last two years and who now may find light at the end of the tunnel.


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CATEGORIES: Labor Market



COMMENTS (5 to date)
ThomasL writes:

There has been much made over the last few years about the "birth/death" formula used for calculating job creation in newly started businesses.

Do you have any particular opinion on that aspect of the numbers?

Tom Lindmark writes:

Right now the light at the end of the tunnel would appear to be in rather low paying occupations. Retail and leisure & hospitality seemed to be the sectors with the largest growth though health care continued its inexorable climb.

Hopefully the momentum of which you speak will translate into the creation of better paying jobs. I just don't think we are going to build a terribly viable economy putting the young to work mixing cocktails and advising on the selection of the proper tie.

Marcus Nunes writes:

Arnold
I´m a great fan of Leamer. My blog name - Historinhas ("little stories")- was inspired on "Patterns & Stories".
Yes, jobs will most likely continue to show gains, but unfortunately the "patterns" do not allow us to be optimistic about regaining a "normal" level of employment any time even in the distant future.
http://thefaintofheart.wordpress.com/2011/05/06/jobs-where-are-you/

fructose writes:
I think that the demographic group that stands to benefit the most from the recovery is workers in their 20s, who have faced a devastating job market the last two years and who now may find light at the end of the tunnel.

This is the situation I find myself in as a 23 year old college grad. I limped along with internships, part time jobs, and debt. I struggled to even get interviews for "real jobs" (permanent jobs in my career field). Next week I have 3 interviews scheduled, including one call-back interview. Things do seem to be turning around for me.

Elvin writes:

The snobbery of those putting down retail and low level service jobs is disappointing. Not everyone can be an engineer or lawyer. The low skill of the workforce has been devastated and yet we despair when we see some meaningful gains in this sector? For 10 to 15% of the workforce, this is a great development. These people have learned to get by on 18k to 23k a year. I admire them for their perseverance.

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