3 Signs of the Ongoing Jobless Recovery
Whether the US continues to face the specter of a double-dip recession or a full-fledged second leg down, we’ll find out eventually. What’s more clear now is that many of the jobs lost in the global downturn are simply not returning any time soon… the economy remains due for more correction.
For three signs of ongoing joblessness during this lackluster “recovery” we turn to Fortune:
“Average workweek is still short. During the recession, many employers cut hours. And those hesitant to take on workers full-time hired part-timers. Until we see the average workweek in the private sector rise, there isn’t much reason to believe that there’s sustained job growth. After all, employers will use their existing workers for the maximum hours they can work before hiring new people…
“Unemployment claims and the magic number. Each Thursday, the Labor Department releases a tally of the newly jobless applying for aid. As with any statistic that captures data over such a short period, virtually anything from bad weather to holidays could impact the tally. So whether initial unemployment claims go up or down week-to-week doesn’t matter as much as the tally itself… at 451,000 — still too high to really celebrate…
“Corporate cash balances remain high. When companies are sitting cash at record levels, that means they’re either saving for some kind of strategic investment or simply not hiring. In today’s case, most companies have held off on hiring amid uncertainty of the economy. Non-financial companies in the S&P 500 reported $837 billion in cash at end of March, a 26% increase over the previous year’s $665 billion. This means companies are holding cash reflecting 10% of their value…”
These three factors — the short average workweek, massive overall unemployment claims, and high corporate cash balances — provide tangible evidence the US labor market is still incapable of showing any real signs of life. And, with the current unemployment level of 9.6 percent, it remains little improved from its worst levels during of the global meltdown. You can read more details in Fortune’s coverage of three signs it’s truly a jobless recovery.